All of the states require drivers operating a motor vehicle to be financially responsible for accidents up to a fixed dollar amount. Most of the states require this to be in the form of liability insurance purchased from an insurer. Insurance is the most popular means of meeting the requirements, even in those states allowing other options.
Bodily Injury Liability (BI) coverage pays damages for injury to another person(s), for which the insured driver is legally liable, through the ownership, maintenance, or use of a covered vehicle, up to the specified limits of the auto policy. The insurer also agrees to defend the insured and pay all legal defense costs. Defense costs are in addition to the policy limits.
The minimum required limits of coverage vary by state and are represented in the form where the first number refers to the dollar limit (in thousands) of bodily injury liability coverage for each injured person, the second number refers to the total limit of BI coverage for all persons injured, and the third number refers to the property damage liability (PD) limit per accident.
For example, 10/20/5 means $10,000 of bodily injury liability coverage for each injured person, subject to a limit of $20,000 bodily injury coverage for all persons injured in an accident, $5,000 in liability coverage for property damage. In most states, a policy can be purchased that contains a single limit of coverage for both bodily injury and property damage liability. Auto tort insurance laws determine how liability is assigned in an accident. There are three types of auto insurance systems:
1) traditional tort;
2) no-fault; and
3) add-on.
In a traditional tort auto insurance system, an accident victim can sue the at-fault driver to recover economic or monetary damages (medical, wage loss, rehabilitation, funeral expenses, etc.) and general or “non-economic” damages (pain and suffering).
Under tort systems, an insured can purchase medical
payments coveragethat provides compensation for their own medical and funeral benefits without regard to fault.
In a no-fault auto insurance system, losses must surpass a specified threshold before an injured person may sue for damages resulting from an accident.
The threshold can be monetary—where tort restriction does not apply until damages are above a certain dollar amount—or it can be verbal—where tort restriction applies, except for injuries of the type and severity verbally stated in the law.
A few no-fault states have a choice system where the policyholder can retain unrestricted tort rights, or choose to limit his or her right to compensation for noneconomic damages in exchange for a lower liability premium.
In those states where limitations on recovery for non-economic or other damages are required, or offered as a choice, insurers will likely pay fewer BI claims at lower settlement amounts. The cost of liability coverage might be lower in these states.
Whether no-fault coverage is required or optional, a policyholder can purchase personal injury protection(PIP) coverage that provides the policyholder with a broader range of benefits for economic damages that cannot be recovered through a lawsuit. Depending on state law, PIP may be required or optional.
Some of the states have laws that require auto insurers to offer PIP benefits but do not restrict the right of the policyholder to pursue a liability claim or lawsuit, as well. In these states, PIP is “added on” to the existing tort liability system, sometimes in the form of separate packages of PIP coverages similar to those sold in no-fault states, and sometimes by simply offering to add some wage replacement benefits to the medical and funeral benefits in medical payments coverage.
0 komentar untuk Bodily Injury Liability