Question

A friend, explaining his position with respect to liability insurance states, "I don't feel I need the high limits of liability because I don't make that much money. If I were a doctor or a lawyer, I would carry higher limits of liability coverage, but since I am not, the $100,000.00 minimum included in my homeowners policy is enough." Do you agree or disagree and why?

Answer 1

I agree with him since liability insurance covers the policy holder against legal claims (law suits) due to personal injuries or damages caused to other people or their properties.

Generally people or businesses exposed to higher risks are covered by policies with high amounts, e.g. a manufacturer of any type of product (or really any type of business, even services), a doctor or more commonly anyone who has a car.

Since this is a homeowners policy, then a low limit should be sufficient. Just think a¿bout it, how can your house damage someone else? Maybe a neighbor or someone else visiting you slips and suffers an injury, but the possibility of the harm being serious is very low. If this included a car insurance policy, then you could request a higher amount, but not for a house.