What is Liability Insurance?

pexels-sora-shimazaki-5668481Have you ever wondered what liability insurance is? If you have, you’ve come to the right place! You are not alone in wondering what liability insurance means. Rancho Cal Insurance Services is an independent insurance agency and we are here to make insurance easy to understand and easily accessible.

Liability insurance coverage shows up as a listed coverage on many different types of insurance policies. It’s often included with your homeowners insurance and manufactured home insurance policy, your renters insurance policy, your landlord policy, your business insurance policy, your auto insurance policy, your motorcycle insurance policy, your RV insurance policy and your umbrella insurance policy. Needless to say, it’s a very common and important coverage and we want to be sure that you understand what liability insurance means.

As defined by our favorite dictionary, Merriam-Webster, liability insurance is:

“Insurance against loss resulting from civil liability for injury or damage to the persons or property of others.”

Does that clear it up? Okay, maybe not. Let’s explain it a bit further and give an example of why you need liability insurance and why this is an extremely important insurance coverage.

Think of liability insurance as insurance that is there to protect you, and your assets, in case you unintentionally cause harm to someone else or to someone else’s property. If  the other person wants you to pay for the damages or harm that you caused to them or to their property, your applicable insurance policy would come to your defense and pay any liability damages that you were found at-fault for, but only up to the liability insurance limits that you’ve chosen for your policy.

Choose wisely! You can choose the liability insurance limits of your insurance policy. This is true for your homeowners insurance policy, manufactured home insurance policy, renters insurance policy, landlord insurance policy, business insurance policy, auto insurance policy, motorcycle insurance policy, RV insurance policy, and your umbrella insurance policy. The insurance policy will only provide liability insurance coverage up to the limits that you’ve chosen. Will it be enough to cover the other parties injuries?

A quick example of the importance of liability insurance can be seen after an auto accident. Imagine that you are driving your car and accidently hit another vehicle. The police determine that you were the at-fault driver, which means that you are liable for the other parties injuries and damages. The car you hit had 4 passengers, 2 of which went to the hospital, and their car is totaled. Your auto insurance policy will pay for these damages, but only up to the liability insurance policy coverage limits that you’ve chosen. Do you have enough coverage for all of the medical bills and for the value of the totaled car? If you don’t, you can be held financially responsible for the remainder of the damages. If your current policy only has the State minimum limits, you may not have enough coverage. We recommend choosing the highest liability limit that you can afford. Additionally, we recommend an Umbrella insurance policy for even more liability coverage.

Rancho Cal Insurance Services is here to help you with your auto insurance, home insurance, renters insurance, business insurance, manufactured home insurance, RV insurance, motorcycle insurance, and umbrella insurance. We want you to be protected. We’ve been helping clients right here in our local Temecula & Murrieta community and all over California and we can help you too! Give us a call today and see how easy it can be to start protecting yourself with an insurance policy for your home, business or automobile today.