The Most Important Consideration on Your Auto Policy

 

Car Accident- Liability Coverage

Liability, Liability, Liability!

When talking about the dreaded “auto insurance,” the term “liability” often gets thrown around , but what does liability really mean and why is it so important that you know exactly what it means?  And what limits of liability coverage should you carry?

LIABILITY DEFINED (Lehman’s terms)

You cause an accident in which you are 100% responsible, you injure someone and cause damage to their property.  You are legally responsible to pay for that persons medical expenses, lost wages, pain and suffering,  and property damage.  You and only you.

Protection of your assets is one of the main reasons you carry auto insurance.  Most people will drive a vehicle for 70+ years.  Every time you drive during that 70+ years, you are risking being in an accident and risking your assets.  If you are responsible for an accident, your finances are in the direct line of fire of a lawsuit or to pay for the damages of the injured party.

Enter liability coverage.  Your liability coverage serves as the first line of defense in protecting what you are working so hard to earn.  It pays for medical expenses, lost wages, pain & suffering, and your defense costs should you get sued.

Auto accident claims can play out like this.

Example:

You accidentally hit a family of four. All four go to the hospital. One of them suffers significant injuries.  Two of them miss work for a month, and all have 8 weeks of physical therapy.  They sue because they believe it will increase their chances of expenses being paid.

 

Here is what they sue you for:

Medical expenses:
$150,000
Lost wages:
$15,000
Pain & Suffering
$30,000
 
PLUS YOUR OWN:
Defense cost:
$50,ooo

TOTAL: $245,000

You may be thinking this is an exaggeration of sorts, here are a few cases from just one area law firm: http://www.theparkerfirm.net/recent-cases-news/

This is real folks.   We recommend increasing your liability limits to the maximum you can reasonably afford.  The good news is that for most, the increased coverage cost is minimal and makes it much more difficult for someone to have access to your personal assets.

For help with this or any of other insurance related questions, email steve@stevewhiteinsurance.com

 

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