079: Auto Insurance – Liability Protection
Let’s shift gears a bit in our discussion about Risk Management and talk about Auto insurance.
Many of us own or lease cars and auto insurance is a requirement by law and I would focus more on protecting yourself in case of bad accident.
Let’s look at auto insurance closely to make sure we understand what kind of coverage is appropriate.
Auto insurance just like the homeowner’s or renters is designed to provide protection to you in case of an accident.
- Liability protection – this part of the policy provides coverage to you in case you were deem at fault in a car accident, it will pay for repairs, medical costs for injuries suffered by others in the vehicle, plus other expenses related to the accident such as legal fees. Your liability limits are set at the time you purchase your policy.
There are two parts to liability coverage:
- Bodily injury liability – which pays for all expenses associated with the accident except for the property.
- Property damage liability -property damage to others.
The limits are the maximum amount the policy will pay out; anything above that would come out of your pocket unless you have other insurance, such as umbrella.