What Is Residual Bodily Injury Coverage?

Auto insurance serves as a financial safeguard, protecting individuals from the significant costs that can arise from vehicle incidents, whether damage, theft, or injuries. It functions as a contract where, in exchange for regular payments, an insurance company agrees to cover specific losses outlined in a policy. This article focuses on residual bodily injury coverage, clarifying its purpose and function.

Understanding Residual Bodily Injury Coverage

Residual bodily injury (RBI) coverage is a form of liability insurance designed to protect a policyholder found at fault for an accident that causes injuries to others. This coverage provides financial compensation for these injuries. The “residual” aspect means it addresses damages that exceed initial or primary benefits, particularly in no-fault states. It also covers lasting effects or complications that persist after an initial injury has healed, which can have long-term impacts on a person’s health, lifestyle, and ability to work.

RBI specifically applies to injuries sustained by other parties involved in the accident, such as other drivers, their passengers, or pedestrians. It does not cover injuries to the policyholder or their own passengers, as those typically fall under different sections of an insurance policy. RBI steps in when other forms of coverage are exhausted or insufficient.

When Residual Bodily Injury Coverage Applies

Residual bodily injury coverage becomes relevant under specific legal frameworks, largely depending on whether an accident occurs in a “no-fault” or “tort” (at-fault) state. In no-fault states, Personal Injury Protection (PIP) or similar coverages initially pay for medical expenses and lost wages for the policyholder and their passengers, regardless of who caused the accident.

RBI coverage applies once these no-fault benefits are exhausted, or when the injured party meets a “serious injury threshold” defined by state law. This threshold allows an injured party to pursue a claim against the at-fault driver for additional damages, including pain and suffering. Examples of serious injuries include disfigurement, fractures, permanent loss of a body function, or an injury preventing normal activities for a significant period.

In “tort” or “at-fault” states, RBI functions more directly as standard bodily injury liability coverage. The at-fault driver’s liability insurance is responsible for the damages of the injured parties from the outset. However, it can still apply if the severity of injuries leads to claims exceeding initial coverage amounts.

What Residual Bodily Injury Coverage Includes

Residual bodily injury coverage financially compensates individuals injured in an accident where the policyholder is found at fault. This includes medical expenses, such as emergency care, hospital bills, doctor visits, rehabilitation, and ongoing treatment costs.

RBI coverage also helps with lost wages or income if the injured party cannot work due to their injuries. It can cover compensation for pain and suffering, addressing non-economic impacts like emotional distress or prolonged physical discomfort. In the event of a fatality, funeral expenses are also typically covered.

If the at-fault policyholder is sued by the injured party, RBI coverage often includes legal defense costs, such as attorney fees and court expenses. This coverage does not include damage to the policyholder’s own vehicle, injuries sustained by the policyholder or their own passengers, or damage to other people’s property; these are covered by other specific insurance coverages like collision, personal injury protection, or property damage liability.

Setting Residual Bodily Injury Coverage Limits

Residual bodily injury coverage limits are typically expressed using a “split limit” format within an insurance policy. This format is commonly presented as three numbers, for example, $25,000/$50,000/$25,000. The first number represents the maximum amount the policy will pay for bodily injuries to any one person in a single accident.

The second number indicates the maximum total amount the policy will pay for all bodily injuries combined in a single accident, regardless of how many people are injured. The third number, while not directly related to bodily injury, denotes the maximum amount for property damage liability per accident. Some policies may also offer a “combined single limit,” where one overall amount applies to both bodily injury and property damage claims, offering more flexibility in allocation.

Selecting adequate coverage limits is important to protect personal assets. If the costs of injuries from an at-fault accident exceed the policy’s limits, the policyholder may be personally responsible for the remaining balance. Many states require minimum liability coverage, but these minimums are often insufficient to cover serious injuries, making higher limits a prudent choice to avoid significant out-of-pocket expenses.

Adding Residual Bodily Injury Coverage to Your Policy

Residual bodily injury coverage is typically a standard component of most automobile insurance policies, given its role in liability protection. Policyholders generally select or adjust their coverage limits when they initially purchase a policy or during renewal periods.

Individuals can modify their residual bodily injury coverage limits by contacting their insurance agent, utilizing their insurance provider’s online portal, or directly calling the insurance company. These methods allow for a review of current limits and the selection of higher amounts if desired. It is a straightforward process to ensure the policy adequately reflects one’s liability exposure.