Essential Auto Insurance Coverage to Protect Your Assets

The amount of coverage we carry on our auto insurance policies isn't something we usually give much thought to, but in order to safeguard your home and property from potential judgments in case of an accident, it's crucial to have adequate auto insurance coverage. If you are found at fault for an accident that leads to significant injuries your insurance coverage may not adequately protect you from your assets being pursued in a claim against you. 

Below are vital types of insurance coverages worth considering:

• Liability Insurance

  • Bodily Injury Liability: Covers medical expenses, lost wages, and legal fees if you're found responsible for injuries caused to others in an accident. If  a victim's injuries and expenses exceed these limits, your personal assets i.e. your home and other belongings may be pursued to make up the difference. It is crucial that your limits reflect the potential risk to your assets.
  • Property Damage Liability: Covers the repair or replacement of another person’s property if you're at fault in the accident. If these limits are insufficient to cover expensive repairs you may be responsible for the difference.

• Collision Coverage

  • Pays for damage to your own vehicle in the event of an accident, regardless of fault. While it doesn't directly protect your property, it helps avoid financial strain in severe accidents.

• Uninsured/Underinsured Motorist Coverage

  • This protects you if the at-fault driver lacks sufficient insurance to cover your damages (including personal injuries) or has no insurance at all. If your injured by an uninsured motorist and don't have this coverage your avenues to recovery for your injuries may be severely limited. 

• Umbrella Insurance

  • An umbrella policy offers additional liability coverage beyond your auto and home insurance limits. It safeguards your assets like your home, if a lawsuit exceeds your standard coverage limits.

• Personal Injury Protection (PIP) or Medical Payments (MedPay)

  • Covers medical expenses for you and your passengers, regardless of fault. While it doesn't directly protect your property, it mitigates financial loss.

Factors to Consider When Setting Limits

• Assets at Risk: Assess your home, savings, and other assets' worth. Choose coverage limits that will protect these assets if you're sued. If the damages exceed your limits the injured party can go after your personal assets including your home and other possessions. 
• State Minimums: Be aware of your state's required minimum coverage, though these might not fully protect your assets. Full coverage usually means you meet the state minimum in required coverage. Take note that this usually isn't enough to protect your assets if the accident leads to significant injuries to another party. 
• Risk Level: If you drive frequently or in high-risk situations (like busy urban areas or bad weather), higher coverage limits may be necessary.

By ensuring the right amount of coverage, including liability and possibly an umbrella policy, you can shield yourself from financial disaster if a lawsuit follows an accident. Regularly review your policy to ensure it aligns with your assets and current needs. I you have any insurance related questions regarding your coverage or any accident related inquiries please feel free to contact my office.