IIABNY Advises Motorists: Don’t Skimp On Auto Liability Insurance

December 1, 2011

The Independent Insurance Agents & Brokers of New York is advising motor vehicle owners not to skimp when they buy auto liability insurance.

Auto liability insurance pays for amounts the insured person owes as damages for bodily injuries and property damage he has caused to someone else due to an auto accident.

It also pays for the cost of hiring attorneys to provide legal defense. Most states, including New York, require all auto insurance policies to provide at least a minimal amount of liability coverage.

In the current difficult economic climate, car owners may be tempted to buy insurance from providers who advertise low-cost coverage. Often, these providers’ policies provide only the amounts of liability insurance required by state law. IIABNY and its member independent insurance agencies and brokerages say buying such policies is a mistake.

Buyers may assume that agents and brokers say this in order to sell more expensive policies. But in reality, larger amounts of insurance do not raise the premium and associated commission by much.

Rather, agents and brokers have an ethical duty to recommend the coverage that will best protect their clients, the association said.

IIABNY chairman Christopher Brassard points out that the cost of buying additional insurance is often relatively small.

“You are responsible for the safety of your passengers, your fellow drivers, other people’s property, pedestrians and yourself. If you don’t have enough liability insurance to cover the amounts you owe after a car accident, you will have to pay the remainder out of your own income and assets.”

New York State insurance law requires all auto insurance policies to provide liability coverage for one accident of at least $25,000 for injuries to one person, $50,000 for injuries to multiple people, and $10,000 for damage to other people’s property.

But $25,000 will be spent pretty quickly if an injured person needs emergency surgery, a long hospital stay, and extended physical therapy, Brassard said. And $10,000 for property damage coverage won’t be enough to replace a wrecked 2010 Ford Focus, which is not the most expensive car on the road, he observed.

Source: The Independent Insurance Agents & Brokers of New York

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