You may think that minimum liability coverage is more than enough for you or that high liability limits are only for the rich.
These claim examples could change your mind:
- The insured's daughter hated math class as well as the teacher. The daughter made several "disparaging" and false remarks about her teacher online. The teacher sued the parents for personal injury in the amount of $1 million.
- A 28 year-old engineer dove into a friend's above ground swimming pool, struck his head on the bottom, and as a result became a quadriplegic. He sued both the homeowner and the pool manufacturer. The court found the homeowner to be 60 percent responsible and the pool manufacturer to be 40 percent responsible and awarded $10,000,000.
Why are liability limits important?
1. Accidents happen -
If an accident happens and other people are injured, you will want to make sure you have adequate liability limits to respond to the claim. If someone falls on a slippery walkway at your house, your dog bites a visitor or if you unintentionally cause a car crash, an injured person can collect damages from your car or home insurance.
2. Low cost of increased liability limits -
Increased liability limits, particularly on home insurance, are not expensive. Increasing your limits from $300,000 to $1,000,000 on your home insurance may be less than $30 extra a year! Higher limits on your auto policy will cost a bit more, but a large liability loss is also more likely from an auto accident.
3. Law suits -
If you do not have a high enough limit to cover a loss, the injured party may have a right to collect damages from you personally. And don't think, "well, I don't have anything to take!" will help. Courts have allowed damages to include all assets, including retirement plans and future wages. So, if you do not have enough coverage, you may be paying for a long time!
How comfortable are you that you have the limits you need on your home or auto insurance? Click the link below to take our quiz.