Insurance Blog

Being Financially Responsible with Insurance Liability Limits

Oct 2019

Homeowners Policy - Limits of Liability

If you own a home, you really should consider increasing your auto liability limits to mirror the liability limits on your homeowner's policy.

Homeowner’s Personal Liability insurance protects you against lawsuits for bodily injury or property damage that you, your family members, or pets cause to other people. The liability limits on your policy pay for both your legal defense and any court monetary awards—up to the limit stated in your policy. If you're a homeowner, it might be worthwhile to increase your liability coverage limits above the legal minimums. Minimum liability limits generally start at $100,000. However, it is always a good idea to discuss with your independent insurance agent whether you should increase these limits. If a neighbor or guest should ever be injured on your premises, the no-fault medical coverage would apply. The medical bills can be sent directly to your insurance company, thus avoiding a liability claim being filed against you.

Auto Liability Insurance

Auto liability insurance is mandatory in most states. If you are at fault for the accident— the liability coverage will reimburse the other driver’s expenses. Auto liability coverage includes bodily injury and property damage liability coverage. Most states require that drivers have each of these types of coverage.

Cutting your auto insurance coverage to minimum limits may save you some money upfront, but it could also cost you much more in the long run. With the rising costs of medical care as well as the prevalence of expensive lawsuits, you really can’t afford to be underinsured. This is especially true if you are in an at-fault accident and the other driver sustains serious injuries involving hospitalization. After all, the leading cause of bankruptcy in the U.S. is due to medical debt.

Bodily injury and property damage limits can be bundled together. For example, you may be able to purchase auto liability coverage with limits such as:

25/50/10 ($25,000 bodily injury per person limit, $50,000 bodily injury per accident limit, $10,000 property damage limit)

100/300/50 ($100,000 bodily injury per person limit, $300,000 bodily injury per accident limit, $50,000 property damage limit)

If, like most people, you don't have an exorbitant amount of extra cash laying around to fund an automobile accident, including medical bills, paying slightly higher premiums for increased coverage limits can offer the financial protection you will need in case of an unfortunate event. It is also important to remember that minimum limits might not be enough to cover a multi-vehicle accident.

Even the best drivers have the occasional accident. Through increasing your auto coverage limits, you can design a policy that protects your assets and provides you with peace of mind.

Most insurance experts recommend that you have limits of at least $100,000 of bodily injury liability protection per person/$300,000 for bodily injury per accident/$100,000 for property damage (100/300/100).

If you own a home and auto, you should consider increasing your liability limits to match so that you are not underinsured. PolicyPro can make certain you are adequately insured, and that your property and family are protected. Finding the right insurance coverage has never been so easy, and the PolicyPro RateFinder™ makes the process faster than ever. For a free estimate on homeowner’s insurance as well as auto insurance coverage, go to www.policypro.com and see for yourself.

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