Increase Your Auto Liability Insurance If You Fall Into These Three Categories
The minimum car liability may vary by state, but most of them do not offer enough protection in case of a lawsuit. For example, the minimum coverage in Hawaii is $40,000 for bodily injury per accident. If that is what you currently carry, it may not be enough to protect you from serious accident lawsuits. Everybody can benefit from increased coverage, but you definitely need it if you fall into these three categories:
You Have Valuable Assets
When an accident victim sues you successfully, and your insurance limit doesn't cover the award, they will come after your personal assets. Of course, this only makes sense if you have personal assets that the victim can garnish. If you don't have considerable assets, most victims will just take what is available and drop the case. Therefore, if you have valuable assets that can be garnished if you lose a lawsuit, you need to increase your auto liability limits to protect those assets. Examples of valuable assets that may be used to settle injury awards include home equity and savings (except not 401k and IRA).
Your Risk of Facing an Accident Lawsuit Is High
Analyze your situation and gauge your risk of causing an accident; do you consider your risk as low or high? If your risk seems high, then you need to increase your limits to protect yourself. Therefore, teenagers, those who love speeding, and those who frequently loan their cars to other people should buy additional coverage since their risks of facing accident lawsuits are high.
Remember to take into account everybody who drives your car. For example, even if you are a good driver with an impeccable driving history, you should consider your risk of facing an accident lawsuit if you have a teenage driver in your household. This is because, despite their lack of driving experience, teenagers tend to be more reckless than mature drivers.
You Frequently Carry Multiple Passengers
Lastly, it's also a good idea to increase your liability limits if you often have passengers in your car. For example, you need this coverage if you usually carpool with your neighbors. Remember, if you are deemed to be at fault for an accident that involved several victims, all of them will seek compensation from your auto insurance. Since they will all be sharing your coverage limit, it makes sense that the available funds are likely to be inadequate.
Analyze your situation and see if you have adequate coverage. It's better and cheaper to pay the increased premiums for more coverage to protect your investments from potential lawsuits. If you aren't sure where you stand, talk to an auto insurance agent from a company like Reinard Insurance Agency Inc to help you with the analysis.
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