Bodily injury insurance: what does it cover?

Sixteen-year-old Sally heads south on I-5 near Eugene, Oregon. She hears a ring and knows that she just received a text message. After rummaging through her bag, she finds her phone and checks the message. Her best friend Jane from her, in Washington, has just seen Steven, Sally’s latest crush, at the Vancouver mall.

“Should I talk to him?” Jane wants to know.

Sally has to be in Ashland in three hours, so stopping is impossible. And besides, she has no problem texting and driving. She could do it blindfolded.

Minutes later, Farmer Tom, who is harvesting ryegrass seeds, is surprised by Sally’s red VW Beetle. Farmer Tom spends five weeks in the hospital and misses the height of the seed harvest season.

Back home in Vancouver, Sally looks at her auto insurance policy and wonders, “BI – Bodily Injury, what does this cover?”

The policy says it will “pay for damages an insured is legally responsible for due to bodily injury to others caused by an accident resulting from the ownership or use of your car.”

Hmm… Sally thinks… what are “damages?”

DEFINED DAMAGES

Black’s Law Dictionary defines damages as “a sum of money awarded to a person because of the [wrongful act] of other.”

“Okay, so ‘damage’ just means money,” Sally correctly concludes.

“But how do the courts decide what money to award?”

TYPES OF DAMAGES

Damages, says the Blacks Law Dictionary, fall into three broad classes: real, nominal, and punitive.

Nominal damages are those awarded when a right has been violated but there is no substantial harm. When Sally drove up to the farmer’s field, that was a trespassing. If she had done it herself without loss to the land or the equipment or the farmer, that would have entitled the farmer to nominal damages (usually one dollar) per trespass.

Punitive damages, also known as exemplary damages, are intended to punish the defendant. They may be granted when the defendant’s conduct has been particularly bad. If Sally had intentionally left the road to hit the farmer, a jury in Lane County, Oregon could award punitive damages.

Actual damages, also known as compensatory damages, are those awarded for actual or actual loss or injury. This is what is most commonly covered by bodily injury insurance. In most car accident cases, actual damages are divided into general damages and special damages.

SPECIAL DAMAGES

These, says the Blacks Law Dictionary, are the “actual result of the reported injury, by reason of special circumstances or conditions.” Special damages are easily quantifiable. In a personal injury case, three important components of special damages are medical services, loss of income, and the home.

Medical expenses

This includes hospital visits, prescriptions, and neck braces. Medical expenses must be reasonable and necessary. Jurors can cut medical expenses they deem excessive. If Farmer Tom paid a $10,000 chiropractic bill, the jury could decide that he overtreated and reduce the bill to $3,000.

Farmer Tom might have difficulty sleeping after the accident and insist on a new mattress prescribed by his GP. It would be difficult to convince a jury that this was a medically necessary expense related to the accident.

lost income

Farmer Tom hired family and friends to complete the seed harvest so that the harvest would not be lost. The additional expenses he incurred reduced his earnings and therefore he would have a claim against Sally for lost earnings. This would be covered under her bodily injury policy.

domestic services

Farmer Tom and his wife are very progressive and that’s why they share the household chores. He is responsible for mowing the lawn and washing the cars on Saturday. To fill in for himself in these tasks, Tom had to hire a neighbor. Tom could recover the money paid for these services in a personal injury claim against Sally, so this would be covered under his bodily injury policy.

GENERAL DAMAGES

These are the hard-to-quantify aspects of bodily injury damages. What is commonly known as “pain and suffering” falls into this category. Loss of enjoyment of life also falls into this category. The overall damage is often approximated using a multiplier such as 1x, 2x, 3x times the reasonable and necessary medical expenses.

LEGAL COSTS

If someone sues you after an accident, your bodily injury coverage will also pay for an attorney to defend you. These attorneys, known as “insurance defense attorneys,” will be hired by your insurance company for you.

ABSTRACT

Bodily injury coverage protects you if you are sued after causing physical injury to another person. Coverage extends to anyone who uses your car with your permission. Your coverage also protects you if you drive someone else’s car with permission.

The basic items covered include medical expenses, lost wages, household services, pain and suffering, and attorney fees to hire an attorney to defend you.