Tuesday, October 21, 2014

Auto Insurance Coverage: Legal Requirements

“What If…”  A Lawyer’s Logic

Auto Insurance Coverage: What is Required vs. What You Need

Many people don’t fully understand what they pay for when buying auto insurance.  Some people think about the vehicle they drive, its value, and the cost of premiums when considering insurance purchases.  Some even think if they own an older vehicle, there is no need to have “full coverage.” WRONG! 



This is the most basic component of auto insurance.  Liability coverage means that your insurance company will cover damage that you cause to another driver’s vehicle, as well as their medical bills and lost wages due to an accident or damage to property.  This coverage is often called “Bodily Injury” insurance on some policies.

In Idaho, “liability coverage” is defined as the amount your policy would pay for injured people or damaged property due to your negligence.  Idaho Code §49-117 (18) states:

"Proof of financial responsibility" means proof of ability to respond in damages for liability, on account of accidents occurring subsequent to the effective date of the proof, arising out of the ownership, maintenance or use of a motor vehicle, in the amount of twenty-five thousand dollars ($25,000) because of bodily injury to or death of one (1) person in any one (1) accident, and, subject to the limit for one (1) person, in the amount of fifty thousand dollars ($50,000) because of bodily injury to or death of two (2) or more persons in any one (1) accident, and in the amount of fifteen thousand dollars ($15,000) because of injury to or destruction of property of others in any one (1) accident.

Liability/Bodily Injury insurance tends to be the most expensive part of an insurance premium.  It essentially protects other people when you are at fault.  It also protects you personally up to the limits of your coverage.  You should decide if the Idaho minimum required limits of $25,000 per person/$50,000 per accident are enough to shield you.  If you cause an accident and the other driver’s damages exceed your liability limits, you could be sued for any excess damages.  You can purchase higher limits of Liability/Bodily Injury insurance.  Common higher limit amounts are $100,000 per person/$300,000 per accident and $250,000 per person/$500,000 per accident.

Safe & Smart Travels,


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Tuesday, July 10, 2012


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