Everyone knows that they are legally required
to carry liability insurance. But many
people don’t really understand what that means or how it works.
In simple terms, liability insurance pays to
fix damage that you cause to someone else.
On your auto insurance policy, this is split
into three pieces. Here is an example:
Bodily Injury: 50000/100000
Personal Property: 50000
Let’s say that this was your coverage amount
and you hit another car in an accident.
Your insurance would pay up to $50,000 per person for injuries up to a
total cap of $100,000. And it would pay
up to $50,000 in property damage to fix the other car.
Remember, liability only covers the person
that you hit. It doesn’t cover your
vehicle or anyone inside your car.
There are many different amounts of liability
coverage. We work directly with our
clients to determine how much you need.
This will vary based on factors like how many assets you have, your
income, and home value.
Not having enough liability insurance is one
of the biggest financial mistakes you can make!
Carrying only the state minimum of 15000/30000/5000, could leave you open to a
lawsuit. Think about those cars you’ve
seen on the road worth easily over $40,000!
If you don’t have enough property damage coverage, then you are at
risk.
There is also liability coverage on your
homeowners or renters insurance. It pays
if someone is injured on your property due to your negligence. One common example is a dog bite. This is another time when it’s good to have
enough liability insurance!
Hopefully this clears up any questions you
have about how liability insurance works.
If you need help determining the right amount of coverage for your
family, give us a call at 973-948-3200 for a no obligation review and quote.
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