What is Liability Insurance?
In today’s post, we wanted to speak about liability insurance with respect to automobiles and personal property.
Automobile liability insurance provides protection in the event that you cause harm or damage to someone else or their property with your vehicle.
It does not provide coverage for your injuries or property damage, and there is no deductible applied to liability coverage.
Personal liability occurs when there is an accident, whether inside or outside of your home, that results in another person being injured or their property getting damaged by an action or failure to act for which you are held legally responsible for. That means someone needs to sue you and prove you are responsible for their losses.
Similarly to automobile liability insurance, there is no deductible applied in the event of a personal liability insurance claim.
It’s difficult to know exactly how much liability insurance is enough. In Alberta, the minimum limit required to legally operate a vehicle is only $200,000. However, most Insurers offer limits of $1,000,000 or $2,000,000.
A few years ago, a $1,000,000 limit seemed more than sufficient. However, with continuously rising claim costs, we recommend a limit of $2,000,000 for both your automobile liability insurance as well as your personal insurance. The premium difference in order to increase your limit is minimal (usually less than $50.00 per year per risk).
It is possible that an automobile liability insurance claim or a personal insurance claim could exceed a $2,000,000 limit. There are also some types of claims, such as libel and slander, where your personal liability will not apply. If you’re looking to increase your liability limit, you could consider a personal umbrella.
A. It protects you from the rain
B. It provides you a higher level of liability protection through higher limits and broader coverage
Well, technically both answers are right, but for the purpose of this article, we’re going to go with answer B!
A personal umbrella policy can be purchased in addition to your personal automobile and property insurance policies. As mentioned above, the umbrella policy provides you with a higher level of liability limits as well as broader coverage.
There are many different features to a personal umbrella policy, and the coverage may vary slightly between Insurance Companies. Some of the most common ones are:
As with most insurance products, there are certain risks that are not eligible for the coverage for specific reasons. Some of the most common ones are:
A personal umbrella policy can be set up by completing a simple application, and in some cases, it can be added directly to your existing property insurance policy.
For more information on your liability limits or to obtain a quote for a personal umbrella, please do not hesitate to contact our Office and we would be more than happy to assist you!
The Costen Insurance Team