car insurance

An Introduction to Liability Insurance

Are you afraid that you might run over a bystander or injure someone in a car accident?

Ask any auto or homeowner and they will tell you how important it is to purchase additional coverage known as Liability Insurance to your standard auto and home insurance policy. There is always a chance of you hitting someone on the road while driving to work. The mistake might not be yours, but still, it is you who will be responsible to take care of the medical expenses of the injured person.

Moreover, what if your pet bites or hurts a person visiting your home. A guest could also get injured by slipping off of the wet floor or by falling into a pit. The victim is liable to legally pursue you. To save yourself from these kinds of unexpected or unforeseen expenses, purchasing separate liability coverage for your auto and home is a must. Don’t worry about the price, it won’t cost you more than $80 a year.

How much Liability Insurance do I need for my car?

This is the question that most car owners are puzzled by. Auto liability insurance is not as straightforward as home liability insurance. Before purchasing liability insurance, it is imperative to talk to your insurance agent to figure out the coverages you might need based on the type of vehicle and the area your stay in.

Generally speaking, it is wise to purchase an auto liability insurance that offers total coverage of $300,000. Out of the $300,000, $10,000 should be allocated to cover the bodily injuries while the rest of the money for medical expenses, property damage, etc.

Some insurance companies prefer to split the total insurance coverage limit in three parts; known as “split-limit coverage“. The first part covers the bodily damage occurred while an accident, the second part is the total coverage limit and the last one covers the property damages.

How much Liability Insurance do I need for my home?

Personal liability insurance for your home is generally included in a standard home insurance policy. As a homeowner, it is your responsibility to purchase a policy that offered liability protection up to $500,000 liability limit. It is not just the medical expenses of the injured person you will be held accountable for. A physical injury can put a person out of work for months. Not to mention, the cost of hiring a lawyer.

Do I need Liability Insurance if I stay in a rented house?

Yes, you do need to have a liability insurance coverage even if you stay on a rented property. Your landlord’s home insurance policy will cover other things like natural calamity coverage, theft coverage, etc. But as far as personal liability is concerned, purchasing a standard renters insurance policy will suffice. Besides, most landlords ask tenants to have a standard renters insurance policy up to at least $100,000.

Conclusion

Liability insurance is a safety net that protects you when things don’t go your way. Everyone has good days and bad days. You don’t want a single unlucky moment to cost you your entire property. Hence, by paying a mere $80-$100 a year, you can protect your valuable investment and also put your mind at ease.

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