There is a maximum amount that any insurance company will spend on an accident that involves bodily injury (their “limit”), but the consumer, in fact, chooses what that amount will be.
When deciding how high of a “limit” to purchase, it’s important to consider the fact that medical expenses from injuries, lost wages, physical therapy expenses, and even death all trigger your “bodily injury liability” limit. No matter how serious the injuries, the insurer will never pay more than the “limit.”
Given the cost of medical treatment, tests, and hospital stays, I recommend at least $100,000 of “liability for bodily injury per person.” This means that if you cause injury to another person while driving, your insurance company will pay no more than $100,000 towards satisfying your liability towards that injured person. Note: this is the absolute minimum I recommend. A $1,000,000 limit of liability coverage may only cost you an extra $250 annually. Once you can afford it, buy this coverage every year. It will bring you unbelievable peace of mind if you ever seriously injure another person.
What if you do not have sufficient “bodily injury liability” insurance for the injury you cause? It is tempting to think you will be off the hook, but in fact, courts have been known to garnish future wages and seize assets, like houses, savings, or retirement accounts.
This sobering reality is why it is so important to make sure you are protected with the proper amount of “Bodily Injury Liability Insurance.”