Understanding Liability Coverage in an Auto Accident
Do you fully understand your Automobile Insurance liability limits? Here at Briggs Agency, Inc. we like to take the opportunity with our clients to explain the importance of choosing to hold higher liability limits to help protect their assets. Let’s look at the example below to help clarify the need for higher liability limits:
You are driving and get distracted, or hit a patch of ice, and rear-end the vehicle in front of you. If you cause any injuries in the vehicle you hit, you are responsible for the payment of these injuries as well as the repair to the vehicle!
If there are two people in the other vehicle and they both sustain injuries resulting in a 3 day hospital stay and a surgery for a broken bone, you can easily be responsible for over $80,000 in medical payments based on the average costs of medical care. Let’s say for this example it is an equal split of $40,000 per person. State minimum limits for the State of Indiana is $25,000 per person bodily injury and $50,000 per accident bodily injury. If you held state minimum limits, you would be personally responsible for an out-of-pocket payment of $15,000 PER PERSON; totaling $30,000 that insurance would not pay for since you exceeded the policy limit!
So, how would you pay this? If you don't have that money readily available to pay out they will look at your assets (home, auto(s), investments) and see where they could recoup this expense. They could even try to garnish some of your wages! This is why we suggest higher limits of liability to protect your assets!
We are only touching on liability coverage in this article, however be sure to discuss all of your coverages with your licensed insurance agent to be sure you have coverages that help you sleep well at night. The recommended way to protect yourself is to hold a minimum liability limit of 100/300 or 250/500 or higher. You can purchase a Personal Umbrella Policy which would provide an additional $1 Million in liability coverage. These policies normally cost around $150 a year (depending on number of vehicles, drivers, homes, etc) and payout up to $1 Million dollars once your primary Automobile Insurance policy limits are met and exceeded.
Are higher liability limits expensive? Normally, the increased cost to carry higher liability limits is not that much higher as you increase these limits. We offer A-rated carriers, which means they are financially strong companies, at Briggs Agency, Inc. that offer extremely competitive rates on Personal and Commercial Insurance and offer higher liability limits. We have experienced licensed agents that take the time to explain coverages carefully and answer any questions you may have! Call our office today if you would like a Personal or Commercial Insurance review at 219-769-4840 or visit our website at www.BriggsAgency.com. We proudly represent the Northwest Indiana Area, but we are also licensed in Illinois, Michigan and other states throughout the US!
Briggs Agency, Inc.