Auto Insurance Basics

Auto insurance is something that we all have to have, by law, but not all auto insurance is created equal, and different people have different needs when it comes to insuring their vehicles. Here is a quick guide to the basics of auto insurance terminology:

BIPD(Bodily Injury Property Damage) This is the basis of all auto insurance policies. BIPD is the liability coverage that all drivers are required by law to carry. On insurance forms, BIPD is expressed by three numbers such as 25/50/25. This means:

$25 thousand dollars of liability coverage for bodily injury that YOU cause to one person

$50 thousand of coverage for bodily injury that you cause per occurance---multiple people

$25 thousand for property damage that you cause.

So, the basic 25/50/25 liability insurance is to protect you from liability caused by your accidents. The mimim limits will differ from state to state, but by law, all drivers must at least carry the state minimum liability insurance.

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