Most people expect their insurance company to protect them in the event of a serious auto accident. They expect that the company will provide a legal defense, i.e. a lawyer or legal team and shield them from a devastating lawsuit. What most people don’t know is that the insurance company will bail out on them if they decide that the claim cost will exceed the limits of their policy (check your Auto insurance liability coverage limits). That’s right if the insurance company thinks the damages will exceed your liability limit they will send you a letter that states you are on your own. That means you will have to hire the lawyer or legal team to defend yourself and pay any settlement or legal judgments. Defense costs for major claims can quickly be in the multiple tens of thousands of dollars and the average person is just not prepared to deal with that kind of expense much less a significant settlement or judgment. The way to manage this type of risk is to make sure your liability coverage amount is high enough to deal with most serious claims. You must also weigh this against how much assets and income you have at risk. State required minimums, typically $25,000, are not enough coverage for anyone. This is minimal financial protection for the driver and also creates moral quandary since it is likely not to compensation someone who is seriously injured. The good news is that many drivers already have limits higher than minimum. While many times these limits are still not adequate the cost to increase them is typically not that much. We typically suggest bodily injury liability minimums at $250,000 per person with a $500,000 per accident maximum. For driver with good records the cost is not much more than state minimums and this level of coverage is typically required for a $1,000,000 liability umbrella. The umbrella gives $1,000,000 or more coverage over most all of your liability insurance items. This is usually the home liability and the autos but can include boats, motorcycles, rental properties and more. The costs start at under $200 per year for the umbrella, so for less than the cost of one hour of legal fees you can put and extra $1,000,000 of coverage between a serious lawsuit and all of your assets. You also keep the insurance company in the mix paying for all legal fees in addition to this limit to a much higher threshold. Feel free to give us a call and we can help you determine an appropriate level of coverage that balances protection and your budget and lets you rest easy while your (or your kids) are on the road!
http://caerusinsurance.com/assets/9/automobile.jpg 156 156 Norell Design http://caerusinsurance.com/assets/22/Caerus-logo-150.png Norell Design2014-09-26 17:24:322014-09-27 17:28:55Who is going to pay the lawyer?? Auto Insurance liability coverage limits