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Ask Your Insurance Agent: What is Liability Insurance?

January 31, 2018

Have you ever looked at your insurance policy and wondered just exactly what it is you are paying for?

 

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:  50/100

Personal Property: 50

 

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 25/50/10 ould leave you open to a lawsuit.  Think about those cars you’ve seen on the road worth easily over $40,000!  If you only have $10,000 in property damage, where does the other $30,000 come from? (hint: you!)

 

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 for a no obligation risk assessment.

 

Christina DeSimone is a licensed insurance agent at the DeSimone Agency in Brooklyn, NY.  Call or text her today for a no-obligation quote on your insurance at 718-251-3301.

 

 

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