Auto Insurance Part I: How Much Liability Coverage Is Enough?

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Question: What is Automobile Liability Coverage? How much should we buy?

Short Answer: “Liability” is the legal word for money owed to others for the losses that we create through our mistake or through the mistake of someone, like a child or an employee, for whom we are responsible. Since driving a car is the most likely way we might cause injury to another by mistake, we should carry enough automobile liability insurance to protect our wealth and our future wealth in the unfortunate event that we cause serious and disabling injury to someone in a car accident.

Discussion: Driving is about THE most dangerous thing most of us will do in our lives, and chances are that we will be in more than one car accident. Because using cars for transportation is so important to daily living yet can be so dangerous, Louisiana requires that automobiles be insured against “liability”.

Liability is the legal word for money legally owed to others for their losses that we create through our mistake or through the mistake of someone, like a child or an employee, for whom we are responsible. The state requires this insurance so that if we make a mistake in driving that results in harm to someone else, then the harmed person can sue and recover money to help remedy their losses even if we, as the liable driver who caused the harm, don’t have assets (or don’t wish to use our assets) to pay for it.

The state requires liability insurance coverage with limits of at least $15,000.00 per person per accident and at least $30,000.00 for all claims in any one accident; this is often referred to as “15/30”, “minimum limits”, or “legal limits” coverage.

When it comes to what other limits of liability insurance are available or should be carried, the sky is the limit. It is most important in our experience – in addition to meeting the state’s minimum requirements – to carry enough liability insurance to protect your wealth in the unfortunate event that you cause a major accident that severely injures someone. You want to protect all those monies and net wealth you have worked so hard to save PLUS your future earnings and wealth, since all of this could be seized to satisfy a judgment against you. [Future earnings are subject to garnishment.]

AS IMPORTANT as liability insurance is carrying the additional but relatively inexpensive coverage called uninsured motorist [aka “UM”] coverage, which protects us in the event we are injured by a negligent driver who has no insurance or not enough insurance to cover our losses. Moreon UM coverage in our next update!

As always if you have any questions or concerns about insurance or auto accidents, just give us a call and ask to speak with one of our attorneys. Our attorneys are glad to help! And remember: initial consultations for accident cases are FREE! And in most cases there is no out of pocket charge!

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