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Car Sense

Too Little Liability Insurance Creates a Big Risk

I’m a safe driver. I don’t do risky things. Someone I know would never sue me.

Sound like something you’d say? When it comes to truly terrible events, many people have an “It can’t happen to me” mentality. This belief is not only false—it’s also dangerous.

“Believe me when I say a catastrophic event can happen to anyone,” says Scott Brown, a supervisor in the Erie Insurance Claims Department with 38 years of experience. “Most of the serious cases we see involve simple negligence, not recklessness.”

A few examples

Many of the catastrophic cases Scott has seen over the years involve cars. Surprisingly, most do not involve alcohol or drugs.

“Everybody believes they are superior drivers, but we all make mistakes on the road,” says Scott. “Anything from a momentary distraction to poor weather can contribute to an accident.”

Accidents can have major repercussions if you injure someone else. The same applies if you hit an expensive vehicle like a brand-new luxury car or a commercial truck.

Serious accidents also happen at home due to simple negligence. Some of the most common cases Scott has seen include pool drownings, burns and falls.

Considering the consequences

Beyond the emotional toll serious accidents have on you, there’s also a serious financial impact.

If you injure someone or damage their property, a court could very well hold you liable for the costs a victim incurred. Those costs can soar into the millions quickly, especially if a person needs extensive medical treatment or long-term physical therapy.

“The general rise in healthcare costs, along with the fact that our society is growing more litigious, is contributing to a rise in medical claim costs,” he says.

An accident that causes a serious injury to someone else could easily exceed an average person’s auto liability insurance limits. If your limits are exhausted, personal assets like your wages and savings could be at risk. In some states, even your retirement savings and home could be up for grabs.

How to protect yourself

Basic liability insurance limits on your auto and home are typically $100,000 or $300.000. That’s enough for many situations, but not all. In fact, it won’t even cover the average jury award for vehicular negligence verdicts. (That currently stands at $531,858—and half of all awards are higher than that.)

In those cases, a Personal Catastrophe Liability (PCL) policy could be a lifesaver. A PCL policy, also commonly known as an umbrella policy, provides an extra layer of liability protection over and above both your auto and homeowners policies. It covers you (or a covered family member) if you’re sued because of an accident.

Beyond protecting hard-earned assets, PCL also helps ensure you do the right thing when the wrong thing happens. Unfortunate situations sometimes happen. By having the resources to help compensate someone for their injuries and inconvenience, you’ll have the means to help them.

Not just for millionaires

Many people mistakenly believe that only high‑net‑worth individuals need a PCL policy.

In reality, liability risks are everywhere, and they have the potential to financially derail people of modest means as well as multimillionaires. (Experts recommend you cover at least one to two times your exposed net worth.)

Insurance certainly can’t stop bad things from happening. But it can help ensure that an accident doesn’t leave you, your family and possibly even a victim high and dry. A professional like an Erie Insurance Agent can tell you more about the protection and peace of mind the right liability insurance offers.

Most catastrophes happen as result of simple negligence, not recklessness. Learn how liability insurance can give you better protection and less worry. /blog/liability-insurance Erie Insurance https://www.erieinsurance.com/-/media/images/erieinsurance/erieinsurancelogo.png

ERIE® insurance products and services are provided by one or more of the following insurers: Erie Insurance Exchange, Erie Insurance Company, Erie Insurance Property & Casualty Company, Flagship City Insurance Company and Erie Family Life Insurance Company (home offices: Erie, Pennsylvania) or Erie Insurance Company of New York (home office: Rochester, New York).  The companies within the Erie Insurance Group are not licensed to operate in all states. Refer to the company licensure and states of operation information.


The insurance products and rates, if applicable, described in this blog are in effect as of November 2014 and may be changed at any time. 


Insurance products are subject to terms, conditions and exclusions not described in this blog. The policy contains the specific details of the coverages, terms, conditions and exclusions. 


The insurance products and services described in this blog are not offered in all states.  ERIE life insurance and annuity products are not available in New York.  ERIE Medicare supplement products are not available in the District of Columbia, New York and Wisconsin.  ERIE long term care products are not available in the District of Columbia and New York. 


Eligibility will be determined at the time of application based upon applicable underwriting guidelines and rules in effect at that time.


Your ERIE agent can offer you practical guidance and answer questions you may have before you buy.