By Harvey Brown Special to The Pineapple Question: How much liability coverage should I carry?
Answer: It depends upon who you injure! That may sound like a callous statement but the fact is, if you hit the “wrong person”, a person who would cost you a fortune in a court case, you quickly realize adequate liability insurance is a must. Liability insurance, whether it’s for automobile, homeowners, or business insurance, is coverage that protects you if you are sued by an injured party. Lawsuit costs against you by the party you injured can include, not only their lost income, but also their pain and suffering, medical bills, and even loss of consortium (inability of one’s spouse to have normal marital relations). Here’s an example of what could happen to you. Let’s say you’re involved in an auto accident and you are at fault (i.e. you are liable). Depending upon who you hit, you may find (to your horror) that your insurance limit might be completely inadequate. If the injured person is a young professional, age 30, making $75,000/year presently, you can see that your $100,000 per person/$300,000 per accident liability insurance plan won’t begin to cover just the lost income this person would generate over their lifetime. On top of this, a jury may award a large sum for pain and suffering, whether the person you hit is a high earner or not. Often the way a legal judgment against you is satisfied when your insurance is inadequate is through confiscation of your assets and/or garnishment of your wages.
In my experience, I’ve seen many examples of coverage limits reduced to ridiculously low levels in order to sell a cheap policy. My customers want competitive pricing but not poor coverage, so we protect them by advising them to carry as high a bodily injury liability limit as their insurance budget will allow. Furthermore, I encourage many of them to consider an umbrella liability policy with a $1,000,000 limit, or even higher.
Our insureds have worked hard to achieve success in their life and higher liability limits protect their assets, providing them well deserved peace-of-mind. Let’s face it, insurance is all about having peace-of-mind.
Next Month: Umbrella season – when do you need an insurance umbrella? The Harvey L. Brown Agency are experts in auto, home, business, life/health and represent over 40 companies. If you have questions or concerns about your insurance, call 561-276-0369 Monday-Friday 9-5pm.