We live in a very litigious society, which means one lawsuit can cost you everything. What do we do to protect the things we have worked so hard to accumulate in life?
Liability insurance policies were created to protect assets in the event an insured causes bodily injury or property damage resulting from their negligence. Although not all-inclusive, these types of policies cover a broad range of acts that can provide peace of mind as we go about our daily lives.
See more: Why It’s Important to Read Your Insurance Policy Before You Have to File a Claim
Looking into Liability Limits
As crucial as this coverage is, many select their policy liability limits based on price alone, instead of evaluating the assets they stand to lose. Take auto insurance, for example. The minimum state auto liability limits are $30,000 for each person, $60,000 for each accident and $25,000 for property damage. This means that if the insured was found to be the negligent party that caused an auto accident, these limits would cover up to $30,000 bodily injury for any one person injured. A maximum of $60,000 for bodily injury for the total number of people injured and a maximum of $25,000 for all of the property damaged. Exceeding these limits would not be difficult with today’s costs of medical testing, surgical procedures, doctor appointments, rehabilitation, etc. – not to mention that there are very few vehicles that cost $25,000 or less. The scary part is that the insured would be responsible for covering the amounts in excess of their liability limits.
Picking the Right Policy
Many homeowners and farmowners policies only carry $300,000 of liability protection. Yet many properties have what I call liability magnets. These include swimming pools, trampolines, play sets, lawn equipment, dirt bikes, four-wheelers, gators, golf carts, etc., and farms with barns, tractors, trailers, combines, hay balers, plows and sprayers. A lawsuit resulting from an accident involving a guest or child on your property could be financially catastrophic.
I suggest taking a few minutes to calculate the value of your material possessions. Add in your savings and potential future earnings, then compare that to the liability limits you carry on your insurance policies. Then, have a conversation with your local Farm Bureau agent to discuss liability coverage that truly meets your needs and provides confidence that your assets are protected.
– Allan Williams
