Is Bodily Injury Insurance Required?

There are two types of liability auto insurance: bodily injury insurance and property damage insurance. In most states, both are required if you are operating a motor vehicle on the road, but there are exceptions to the rule. Each state has different financial responsibility laws that motorists must meet.

The purpose of bodily injury insurance is to cover the medical and related expenses of someone injured in an accident where you were responsible for those injuries. If you rear-end someone else's car, for example, and they suffer whiplash as a result, your bodily injury insurance would likely pay for their treatment.

What most people do not realize is that bodily injury insurance has nothing to do with the liability assumed by a driver who causes an accident. State minimums may be low or non-existent, but if you don't have insurance protection, you will still be found liable for covering the medical expenses of an innocent participant in an accident.

For instance, Florida's financial responsibility law does not directly require bodily injury insurance of motorists until they cause an accident that results in injury. At that time, the at-fault party must either prove they carry bodily injury insurance or obtain a bond for at least $10,000 per individual and $20,000 per crash.

In addition, Florida requires that anyone convicted of a DUI must purchase bodily injury insurance in the amount of at least $100,000 per person and $300,000 per accident (§324.023). The additional insurance must be carried for at least three years following the conviction.

Even when bodily injury insurance is not required, or when the minimums are extremely low, drivers should carefully consider their options. If you cause an accident in which injuries to innocent parties are involved, you will have to personally cover expenses that exceed your insurance limits. For example, if you carry $10,000 per person in bodily injury insurance and a victim incurs $60,000 in medical bills, you'll be on the hook for $50,000. Not an ideal situation.

This is why motorists should consider their financial situations before buying bodily injury insurance. If you're living paycheck to paycheck with no investments or savings, higher car insurance limits are advisable. That way, if the worst happens, your insurance company can settle the claim and you won't be putting yourself at risk of financial destitution (or worse).

Additionally, make sure to talk with your insurance agent about the bodily injury insurance requirements in your state. Find out if it is required, first of all, and what the minimum limits are. From there you can make an educated decision about how much insurance to buy.