Whether it’s home, auto, or any other type, insurance can act as a safety net, protecting you from financial harm. Personal liability insurance falls under that bracket but not many know why it can be so important.
Personal liability insurance can be a great way to ensure there are no nasty financial surprises around the corner. If you’re wondering why do I need personal liability insurance, then read on to find out more.
What is Personal Liability Insurance?
Personal liability insurance, such as umbrella liability insurance, is designed to protect you financially if you are held responsible for causing injury to another person or damaging their property. This will include legal costs, medical bills, and any compensation payments.
Two of the many examples of this would be if your dog bites a neighbour or someone falls and slips on your driveway. These accidents can lead to serious financial losses and are usually not covered by other types of insurance.
If you have home or tenant insurance, then you are most likely included for liability for what happens within your hope. But in many other circumstances, you won’t be covered.
What Does Personal Liability Insurance Cover?
An important aspect of whether or not this insurance is right for you is what it covers. Here’s what you can expect from this type of policy.
Bodily Injury – One of the biggest reasons to get this insurance is the risk of causing bodily injury to someone else. The coverage can even go toward their lost wages and rehabilitation costs.
Property Damage – While your property may be covered by your own insurance, damage to others’ property most likely won’t be.
Legal Expenses – If you are sued for any type of incident that is covered in your policy, then personal liability insurance can cover this.
Settlement – If you lose a lawsuit, this policy can cover financial damages.
How Much Coverage Do I Need?
Determining how much coverage you need depends on your situation. The coverage is the policy limit that you have. Anything above this amount you’d then become liable for. There are a few aspects you need to consider.
Assets – If you have substantial assets, then you may want to increase your coverage to give you that extra financial security. The higher your assets, the more you stand to lose.
Your Lifestyle – Frequently entertaining guests, having young children, or being accident-prone can all be good reasons to get a higher level of coverage.
Location – If you live in an area where the property and belongings of others tend to be of higher value, then you may want higher liability limits.
The coverage limits are often quite generous and $1 million of coverage is often seen as a good starting point to protect you from most eventualities. However, you may want to increase this based on the factors above.
What Happens if I Don’t Have Personal Liability Insurance?
The consequences of not having insurance can be devastating. If you are sued and found liable, you’ll then be responsible for paying all the related costs. This can include legal fees out of your own pocket.
This liability can lead to significant financial strain. Depending on the circumstances, this can include forcing you to liquidate assets or perhaps taking on debt to cover your expenses.
Without personal liability insurance, simple events such as hosting a BBQ or taking your dog for a walk can lead you to become financially vulnerable. In the worst-case scenario, you can be forced into bankruptcy by huge financial costs.
Is It Worth the Cost?
One doubt you may have now is the cost of personal liability insurance. How are you going to fit it in with all your other bills? Thankfully, it’s one of the most affordable insurance types, especially given the protection it offers.
When weighed against the potential cost of a lawsuit, the price of personal liability insurance makes a lot of sense. For just a small investment, it can give you invaluable protection and peace of mind. However, it’s important to get the right policy for you.
This involves looking at your risk exposure as we detailed above and ensuring that you have adequate coverage. It’s also important to shop around and compare policies, as no two are going to be the same.
A great step can be to get an insurance broker to do this for you. They’ll be able to answer any question you have, search multiple brokers, and ensure that you have coverage that is a perfect fit for your circumstances.
Final Thoughts
Why do I need personal liability insurance? Hopefully, now you have the answers you were looking for. It’s a form of protection that ensures your assets and financial future are safeguarded by filling in the cracks that other types of insurance don’t cover.
Whether you’re a homeowner or tenant, the relatively small cost of liability coverage far outweighs the risk of being unprotected. If you’re interested in personal liability insurance, then call Buckler Insurance today and we’ll be happy to provide you with a quote.
