Why You Need Automobile Liability Insurance

Many states require that drivers have some minimum amount of automobile liability insurance. The amount of coverage required may vary from state to state. Even if liability insurance is not mandatory in your state, it is still a pretty good idea to carry enough insurance coverage to protect yourself in the event you are at fault in an automobile accident.

To illustrate the importance of automobile liability insurance let us assume that you were driving with three passengers in your vehicle. You are momentarily inattentive and run a red light, striking another vehicle that is carrying a family of four. The three passengers in your vehicle are injured, along with the occupants of the other vehicle. A total of seven people are injured as a result of your operational negligence (running the red light). Each of the seven injured people can sue you personally for their medical bills, pain and suffering, lost wages and a host of other damages.

If you had no liability insurance at the time of the accident, you could be held personally liable for the full extent of the damages caused by your operational negligence. Buying an automobile liability policy after you have had an accident is not the answer. Automobile insurance policies will not cover an accident that has already occurred. In addition, no policy will pay more that its policy limits. You may be personally responsible for any amounts owed the injured people.

If you have automobile liability insurance the insurance company is responsible for hiring a lawyer to defend you should you be sued by the injured people. However, if you have excess exposure (i.e. personal exposure that exceeds your policy limits) you should have your own personal attorney represent you. If an excess judgment is rendered against you your assets (house, wages, bank accounts, vehicles etc.) may be subject to seizure or garnishment.

You should have enough insurance to protect the assets you have acquired. Your personal financial situation will dictate the amount of automobile liability insurance coverage that is adequate for you. An at-fault accident can have devastating financial consequences. Therefore, make sure you have in place adequate automobile insurance coverage.