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Why Your Personal Insurance Liability Coverage Needs to be $2 Million

Posted Jun 26th, 2018 in Media, General, Insurance Tips, Home Insurance, Did You Know?, In the News

In the blink of an eye, an accident can occur, resulting in potential long-lasting financial distress. This is especially relevant if you don’t have adequate insurance in place. That is why it’s imperative you have a $2 million liability limit or greater on your policy. 

Why Liability Coverage Needs to be $2 Million, Youngs Insurance, Ontario

We recognize the implications of not being adequately insured. At Youngs Insurance we are recommending that our clients carry a minimum of a $2 million liability limit to protect their interests.

As your trusted brokerage, we believe it’s our duty to ensure you have superior home and auto insurance coverage. On your next renewal, you may notice your liability limit increased to $2 million.

What is Liability Coverage?

The liability portion of your personal insurance policy covers civil liabilities to another party arising from bodily injury, property damage or other wrongs as a result of the action or inaction of the insured party. It covers only civil liabilities and not criminal.

How Does Liability Coverage Protect You?

Liability coverage steps in to protect you should a loss occur. Your insurance company will provide a defense, cover the costs of that defense and pay a post-judgment settlement up to the limit of liability you have purchased on your policy.

Why Increasing Your Liability Limit Is Important

If you are sued for more than the limits of your policy, you may need to hire a lawyer at your expense to protect yourself against additional judgment. Here is a scenario to help you understand the importance of an increase in personal liability coverage:

In a lawsuit against you, the courts award the plaintiff a judgement of $1.8 million.  Taking all costs into account, the Insurer takes on the responsibility of $1 million (as per the policy limit).  That leaves a remaining $800,000 that you are personally responsible for.

Now you see how imperative it is that your liability limit be high enough to cover potential expenses because if it's not sufficient, you become personally responsible.

How You Can Ensure You Are Protected

Products like a Personal Umbrella Policy provide an extra layer of liability protection and can sometimes be purchased for as little as $15/month. This policy may be better suited for your needs. At any time you can contact your Broker to discuss and/or you can read more about a Personal Umbrella Policy here.

By increasing your personal insurance liability limits or purchasing a Personal Umbrella Policy, you’re effectively reducing your financial exposure, thus providing peace of mind knowing you’re better protected.

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