Bodily Injury Liability (BI)
Pays for injuries and loss of income to others (passengers, pedestrians) if you are at fault in an accident. Crucial: This limit should be high enough to protect your savings and future earnings from a lawsuit.
Comprehensive Coverage
Pays to repair or replace your vehicle if it is damaged by something other than a collision (theft, fire, hail, hitting a deer). Also subject to a deductible.
Property Damage Liability (PD)
Pays for damage to property belonging to others (vehicles, fences, houses) if you are at fault.
Uninsured/Underinsured Motorist (UM/UIM)
Protects you and your passengers if you are hit by a driver who has no insurance or insufficient insurance to cover your injuries or damages. Highly Recommended: Often the most valuable coverage for accident victims.
Collision Coverage
Pays to repair or replace your own vehicle after an accident, regardless of who is at fault. This coverage is subject to a deductible.
State Minimums vs. Recommended Limits
The Problem with Minimums: State-mandated limits are often extremely low (e.g., $25,000 BI). In a serious accident, medical costs alone can easily exceed this, leaving you personally responsible for the rest.
Virtue Recommendation: We generally advise clients to carry liability limits of at least $100,000/$300,000 (per person/per accident) and often higher, especially if you have significant assets (a home, savings).
Who Needs the Extra Protection?
Young Drivers: Consider Accident Forgiveness and higher limits, as inexperienced drivers present a higher risk.
Newer Vehicles: If you have a car less than two years old, consider Gap Insurance to cover the difference between the car’s current loan amount and what the insurance company pays (Actual Cash Value) if it is totaled.
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