The more you have to lose, the more liability coverage you need on your NY car insurance policy. As opposed to property damage which presents a finite loss potential, injury or liability loss potential is virtually infinite.
In New York State, the required minimum coverage for Bodily Injury Liability coverage is $25,000 per person/ $50,000 per accident (25k/50k). Yes, this level of coverage allows you to legally drive in NYS, but it’s hardly adequate protection for most people.
Bodily Injury Liability coverage pays for injuries you cause to other people when you are at fault in an automobile accident.
For example, you are driving down a busy highway during rush hour and you divert your attention for just a moment to adjust the temperature settings in your car just as traffic suddenly slows. Unfortunately you don’t have enough time to apply your brakes before crashing into the car in front of you. The driver and passenger in that vehicle suffer serious injuries and you are being sued for $1.5 million.
You have 25k/50k bodily injury liability coverage. What do you do?
In this situation, your personal financial loss could be severe. A judgment could be issued for a million dollars or more and the $50,000 insurance company payment would barely make a dent in the total amount owned. The equity in your home, personal property, investments and cash/checking accounts are now fair game.
What’s more is that any unpaid amount of the judgement will be listed on your credit report, hampering your ability to get credit, do real estate property transactions and sometimes even prevent you from getting employment in some areas for years to come.
In some instances, wages are garnished and continue up until the point that the judgment award amount has been paid in full.
Unfortunately, accidents happen all the time. You may be a great driver and follow all the rules of the road, yet something out of your control causes you to crash into another car with you being deemed at fault in the accident.
The question is, is it worth it to carry low liability limits just to save a few bucks? Most prudent people would say “no” once they become aware of the potential risk of loss.
The Good News Is?
So you now know the bad news about carrying low liability limits on your auto policy, but there is some good news about raising those limits to an adequate level of coverage.
First, you might be surprised at just how little your premium increases when you increase your liability limits. When it comes to auto insurance in NY, the most significant part of the total policy premium is for the vehicle’s comprehensive and collision physical damage coverage.
Secondly, when you raise your liability limits, insurance companies rate you on a more preferred tier which can help to lower your premiums in the future when you switch to a different carrier. The higher your limits when getting new NY car insurance quotes, the better rate you will get. In fact, over the lifetime of coverage, you can actually save money by having higher liability coverage.
Thirdly, you can get an affordable umbrella policy to add an additional $1 million or more liability protection over your vehicles, home, motorcycles, boats and more. These policies usually start at only a couple hundred dollars per year depending on the scenario.
So how much liability coverage do you need? The more, the better.
If you have any questions regarding auto, home and business insurance options, please contact us, we’re always glad to help. The NY Insurance Hub serves Albany, Schenectady, Troy, Latham, Cohoes, Watervliet, Clifton Park, Saratoga Springs, surrounding Capital Region areas and all of New York State from NYC to Buffalo.