Updated: Aug 4, 2020
Allow me to begin with a brief explanation of liability. You will see liability limits listed on nearly every policy – from auto, to home, to business, to a farm policy – liability is listed on them all. Now, just so you can understand the purpose, liability kicks in on a policy when you are found to be legally liable in an instance or if you are sued (by an individual/medical provider/medical insurance company). Legal liability is not necessarily as simple as “I didn’t allow them to come on my property” or “It was just a mistake.” Legal liability is subject to many laws, regulations and previous court cases that set precedence for similar circumstances.
There is a little rule of thumb that we have had clients use in the past to help determine the amount of liability to carry on your home and auto policy. Take a moment to add up how much equity you have in your assets, retirement accounts and potential future earnings - that can be considered the amount that you may have to lose if you were found to be legally liable. We never want to witness our clients in a situation where they are legally obligated to pay medical expenses, lost wages, etc. out of their own pocket due to having purchased a policy with liability limits that are too low to really protect their assets.
Liability must be expensive if you’re choosing limits like $1,000,000 or $2,000,000? No, actually that is not the case. Increasing the amount of liability on your policy is not costly. You can ask us to quote higher policy limits – or even an umbrella policy – but chances are, we’ve quoted it before you’ve even asked. Why? Simply because we care about your, your family, and what you’ve worked hard for.
*Disclaimer: This summary is being provided for general information purposes only. Actual coverage is subject to all policy terms, conditions, exclusions and limitation.