The liability portion of your policy protects you and your family in the event that you are at fault for an accident and a claim is made against you for either personal injury or property damage.
- Liability coverage protects your personal assets such as your home and/or your wages should a claim be made against you.
- In New Jersey, the law provides minimum insurance limits of $15,000 per person/$30,000 per accident and $5,000 for property damage. If you choose those limits and someone brings a claim against you, he or she can only recover $15,000 for any individual injury and your insurance company will never pay more than $30,000 per accident no matter how many individuals are injured. If the damages are worth in excess of the available liability coverage, the plaintiff has the right to proceed against your personal assets. It is for this reason that you should consider your financial situation when choosing your coverage limits.
- Although the law now allows you to choose a “basic” policy with even lower limits, you will lose the right to sue if you are injured in a car accident, even if you were not at fault for causing the accident. Unless you simply cannot afford better coverage, you need to consider the financial ramifications of not being able to sue for your own injuries and, if you are at fault, in putting your assets at risk.