October 11th, 2011
Bodily Injury Liability (often called BI) covers other people's injuries or deaths for which you are responsible through an auto accident. Somewhat comfortingly, it also provides for a protection if another party in the accident files suit against you for damages stemming from the crash.
The biggest difference between BI and Med Pay, with which it is sometimes confused, is that BI will pay for damages only if the driver is at-fault. Med Pay will pay for damages the insured driver foists upon another vehicle, covering injuries suffered by passengers in the car, or pedestrians nearby -- regardless of who was negligent in the accident.
An additional difference is that Med Pay covers everyone in the car for medical bills only. Whereas BI Coverage can protect you against subsequent legal action. And this protection can extend to realms that Med Pay doesn’t reach -- lost wages, pain, suffering, aggravation, etc.
Property Damage Liability Coverage is more straightforward. If you’re ever at fault in an accident, your PD coverage will pay for the damage done to anyone else's property, whether it's another car, a mailbox, or even a home, up to the limit specified in your agreement. Property Damage coverage also pays for your legal defense costs if you are sued as a result of these damages. This insurance is required by law.
The distinction between Bodily Injury and Property Damage coverage is pretty clear. BI covers people, while PD is strictly property. One ends where the other one begins.