The main purpose of liability insurance is to provide defense and compensate legal judgments for you. When buying liability insurance, people often make two major mistakes: the liability limits, and the amount of coverage.
When determining how much liability insurance is needed, two major factors are considered: Who the person is and how suable you are. People often make mistakes by not considering those main factors. I refer to these as your suability factor.
Many people also have inconsistent limits. They will have $100,000 on their car, $300,000 on their home, and $50,000 on their boat. This is a terrible way to have the limits set as accidents can happen anywhere. For example, let us say these are your limits, and you get into a terrible car accident. In that accident, there will only be $100,000 to cover the expenses. Now let us say that you have the same accident except this time it is with another boat. In this case, it is the same accident, the same amount of damages but less coverage. That is completely illogical and just plain senseless to do that. You had better hope your victim does not remember the boat accident if you want to squeak by with that little amount of coverage.
What about the suability factor? The suability factor is the chance the other party will sue you for more money than they are entitled to. In most cases, people tend to sue you for more than your insurance covers too. The people who are at most risk for this are those who have worth and fortune, either presently or in the future. This is due to greed, as few attorneys would try perusing something that does not exist.
This factor is determined by a few main elements: Current Income, Current Assets, Future Income and Future assets. Current income is determined by your yearly salary, usually the higher you make the more likely of being sued. This is the same with the current assists, if you drive expensive cars and live in fancy homes; it gives off the impression of having a bigger pot of gold and a higher factor.
The future income and assets are mainly based on your current situation in life. There are a few factors that factor into this such as your parents assets (inheritance), education level and future plans. For example, if you are a medical intern, your suability factor is higher, even if you are eating ramen noodles every night.
People who currently have high assets and incomes are aware of their suability factor in most cases; however, many people overlook their future income and potential in life thus neglecting their current suability and being at a high risk for the future.
Florida Auto Insurance
