When to Consider Increasing Your Liability Limits

Liability coverage is foundational in many insurance policies, yet it is often overlooked after the initial purchase. Many policyholders select limits based on what was suggested at the time, rarely revisiting them unless prompted by a specific event. However, shifts in lifestyle, financial status or the legal environment may justify a closer look at whether your current liability limits still fit your needs.

Liability coverage typically applies when you are found legally responsible for bodily injury or property damage. This can involve someone getting hurt on your property or being at fault in a serious car accident. The remaining costs could become your responsibility if a claim exceeds your coverage limits.

Reevaluating Liability Needs

Financial and personal changes often prompt the need to reassess insurance coverage. A growing family, home renovations or new drivers in the household may influence the liability coverage appropriate for your situation.

Even seemingly minor lifestyle updates can increase liability risk. Adding a trampoline or pool, hosting large social gatherings or employing household staff can open the door to more liability scenarios.

What felt like ample coverage five or 10 years ago may fall short under today’s circumstances. In some cases, policyholders explore the option of an umbrella policy, which can offer broader coverage and higher limits beyond what a standard homeowners or auto policy includes. However, whether increasing limits within an existing policy or exploring additional layers of coverage, the decision should be guided by your personal risk tolerance and financial goals.

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Your policy should evolve accordingly as responsibilities grow and risks shift. Regular check-ins with your insurance professional can help determine whether your coverage is still in step with your needs and potential exposures.

Contact Variety Insurance Agency for help choosing appropriate liability limits.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.