Auto Insurance Forum: How much automobile liability coverage is necessary to protect...

Auto Insurance Forum: How much automobile liability coverage is necessary to protect your assets

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By A. Craig Purcell, Esq.

A. Craig Purcell, Esq.

After an automobile accident, you should always stop and notify the police. Indeed, under New York State (NYS) law, anyone involved in an accident must stop at the scene, and if the accident caused injuries or significant property damage, it is very important for you to notify your insurance company right away.  

A car accident can have far-reaching consequences on everyday life for you and any other driver or passenger involved. Although an accident may occur within the blink of an eye, the subsequent negative impacts on an injured person’s ability to work and perform daily activities may continue well into the future. This may potentially jeopardize the health and financial security of all parties involved in the accident (driver, passenger, etc.). The property loss that may be sustained may pale when compared to the severe bodily harm from a crash.

As we have discussed previously, New York imposes the following minimum amounts for liability coverage:

• $10,000 for property damage coverage (PDL) from a single accident

• Bodily injury coverage (BIL) of $25,000 per person and $50,000 for all persons injured

• Death coverage of $50,000 per person killed in an accident and $100,000 for all persons killed in an accident

• No-Fault coverage of $50,000

Types of Automobile Liability Insurance

Liability insurance covers damages if someone makes a claim against you for loss or harm as a result of your negligence. Your insurance provider protects you and reimburses the individual who made a claim against you up to the extent of your coverage. In addition to being required by law, liability insurance is crucial to avoid out-of-pocket losses.

If you cause a car accident, your liability insurance, specifically your bodily injury liability policy, will pay for the injured parties’ pain and suffering or permanent injuries after a settlement is reached or a personal injury verdict is rendered. Remember, NYS only mandates that you hold accident coverage of $25,000 per individual. This amount should be increased to protect you and your assets, so paying for a policy that at least provides $100,000 per individual and $300,000 per accident in coverage for all injured persons is essential, and more is strongly recommended 

So how much liability coverage is enough?

As much as you can reasonably afford. Don’t scrimp on liability coverage when deciding how much auto insurance you need. Doubling liability coverage does not mean you will pay twice as much for the additional protection. Low liability limits place your savings and assets at risk should you cause an accident, making it imperative that you purchase as much liability insurance as you can. This is especially so because medical expenses are constantly increasing. 

High liability limits protect you if you cause an accident and prevent you from possibly having to sell your home to cover accident costs caused by a severe injury to the other party. Therefore, it is crucial that you assess whether your liability limits accurately reflect the assets at risk should an accident occur due to your negligence.

A. Craig Purcell, Esq. is a partner at the law firm of Glynn Mercep Purcell and Morrison LLP in Setauket and is a former President of the Suffolk County Bar Association and Vice President of the New York State Bar Association.