If you are a business person and you use a vehicle in your business, you have some additional work to do. If you have a business policy on your business, your agent may have already visited with you about this, but here are a couple of ideas.
The liability of you vehicle insurance is the most important coverage you have. You can replace the damaged vehicle. sure it will cost you some money, but it probably will not break you. You probably will not lose the business if you lose a $30,000 vehicle. however, if the loss were $300,000 would you be able to stay in business. There are a lot of claims that are paid each year that exceed that number but in the grand scheme of things there are a lot of cars on the road. I can not make a recommendation as to the coverage you need to carry, but if the budget is short and you have to make choices on where to spend your money, make sure your liability has high limits. An umbrella policy with higher limits is also a good idea.
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Since business insurance has so many facets to it, you really need a good agent to handle this. The recommendations that they make to you are done for two reasons. One you need the coverage, two if they don't recommend the coverage and you find yourself in a situation where you need the coverage, it may be that they will be paying for it with their errors and omissions insurance company's payout. As a result, to protect themselves from possible suits, they will advise you of all of your risks and then provide a checkoff of the coverages you decide to take and then sign off on the coverages you refuse. This gives you both a record of what you talked about and what you decided not to cover.
This concept makes good business sense and could certainly carry over into your personal insurance as well. However, this site is dealing primarily with understanding auto insurance without the commercial risk exposure.
Bodily Injury
Defining liability
If you do something to someone that causes them bodily injury or causes their property to lose value, you have created a tort liability situation.
That action will result in your having to compensate them for the damages. In other words make them whole. It is pretty easy to determine how to make people whole when only property is involved, you just need to replace, repair or bring that item back to its previous condition. You may have to pay for loss of time and expenses that the other party paid out while they were inconvenienced, but adding the two losses together is pretty easy.
When bodily injury is involved it is a nightmare. Sure medical bills are easily determined, but when a persons ability to function normally is impaired it is very difficult to assess a value.
Here is an example: You are a Junior in college majoring in engineering. You are on your way home at the end of a semester when you are struck by a vehicle whose driver has run a red light at a busy intersection. You suffer not only loss because of injuries that have healed fairly fast, you also suffered a head injury that will affect your ability to perform at the level you were used to working at before the accident. After three months, with the help of your friends and family you decide you want to re-enter college and finish up your degree.
You have been in contact with the insurance company that has offered you $500,000 to settle the claim.
Your attorney has advised you that $500,000 is a lot of money, you still do not know exactly what the loss is. You don't know exactly how your abilities have been affected. What is a proper settlement?
I don't know the answer, but the practical matter of this case is this, how much money and the amount of insurance does the other party have and if you sued them in court how much could they pay?
The reality of this situation is this. In a matter of days your attorney, will be able to find out what the net worth of the party is that caused this accident. He will be able to find out how much insurance the person has protecting him/her. If, in the investigation the attorneys find out the person is a carpenter with 3 young children who owns his home with a mortgage and a couple of other people working with him it will present one set of possibilities of handling the claim. If on the other hand it is discovered that the person is an investor with a large holding of land, stocks, bonds, and a professional who earns a lot of money, ti would present an entirely different set of possibilities. Knowing that information will help you and your attorneys decide how to pursue your claim. What you actually do will depend on the factors that are presented above and other things that are not presented here. The fairness of how this claim is settled will obviously depend on how much your life will be affected not only in present but 10, 20, or 50 years from now.
Here is the point that I wanted to get at. Let's change this story just a bit. Let's put you in the car that ran the red light and struck this young prospective engineer. How much insurance would you want to have to protect your assets? How would you feel about the fairness of how this claim would get settled?
In conclusion, it becomes clear that liability insurance in our society is an important and responsible thing to carry, not only to protect your assets, but to do the right thing for anyone who is harmed by an accident you cause. The key question that comes into play is, can you say in all sincerity that you have never been a position to have caused an accident? The next time you are driving your two ton missile down the road at 60 mph, think about how much damage you could do.
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