In the world of car insurance, there are two coverages that are very important for everyone to have. Number one, you should always purchase bodily injury coverage when you purchase your car insurance. Bodily Injury insurance covers you if you are at fault in causing an accident and you cause personal injuries to another driver, passengers, bicyclist, pedestrian, etc. The more bodily injury insurance you can afford, the more protection you will have against any potential lawsuits.
In Colorado, for example, the state requires everyone to carry a minimum bodily injury insurance (BI) of $25,000/$50,000. This is merely a minimum and the more money and assets you have to protect, the more BI coverage you should purchase. If you have no real assets, then you may be able to get away with purchasing the minimum coverage of $25,000/$50,000. By the way, the $25,000 covers you if you injure one person and the $50,000 covers you if you injure more than 1 person. So, if you crash into 5 cyclists on the side of the road and injure all of them, $50,000 is the most money that your insurance company will pay out on your behalf.
With regard to Uninsured Motorist or Underinsured Motorist insurance, this is another important car insurance coverage that you should purchase. For example, in Florida, no one is required to carry BI coverage. So, let’s say you drive down to Florida to lay on the beach for a few days and take that much needed beach vacation. While driving in Florida, a car hits you and causes you injury and is at fault in causing your injury. This driver may or may not have BI coverage. If he has no BI coverage, then you must have UM/UIM insurance coverage on your Colorado auto policy or there will be no insurance money to go after, to cover your injuries. Therefore, it is always important to purchase UM/UIM insurance as you never know when you are going to be hit by an uninsured driver.
There can also be the case of the underinsured driver and once again, UM/UIM coverage will protect you in this instance. Let’s say you are driving down I-25 and you are hit by another driver and you end up with $50,000 in Hospital, ambulance and other bills. Let’s also assume that the at-fault driver is carrying the minimum state of Colorado required BI of $25,000. Your medical bills already exceed the at fault driver’s $25,000 in BI, so you would then turn to your own insurance company for the excess coverage which is called Uninsured/Underinsured motorist coverage. Your own insurance company basically “steps into the shoes” of the at fault driver and since you have this coverage and paid an extra premium for this coverage, use it and recover more damages in this way. Again, I encourage everyone to purchase as much BI and UM/UIM coverage as they can afford.