COVERAGE

How much coverage will a typical auto insurance policy provide?

Minimum required coverage amounts are determined by each individual state and must include bodily injury liability for one person per accident, bodily injury liability for all injuries per accident, and property damage liability per accident. For example, in the state of Michigan, all drivers must carry an insurance policy with a minimum coverage of 20/40/10, which is equal to $20,000 bodily injury liability for one person, $40,000 bodily injury liability for all injuries in one accident, and $10,000 property damage liability.

Bodily injury liability (BI) coverage specifies that the auto insurance company will pay for another person’s medical and rehabilitation expenses and any damages for which they may sue. Property damage liability protects the policyholder against liability for damage to property belonging to others, including the loss of the use of the property. In most states, the insured must buy an auto insurance policy that offers at least $5,000 worth of property damage coverage. Many standard auto insurance policy contracts include a higher limit, often $25,000.