Liability Insurance – Insuring Your Financial Future (7th in the “Post D – as in Divorce – Day” Series)

Sandy Balick of Consensus Point Mediation LLC ( explains the importance and some specifics of liability insurance.The necessity to review important health-related matters, post-D Day, has been the focus of recent blogs. Most recently we reviewed the issue of health insurance. With this entry, we move beyond health to matters pertaining to financial well-being. The focus remains on insurance though.

Several common forms of insurance provide important protection to your assets. Much has been made recently about the required-purchase aspect of health care insurance. In reality, the states have long required car owners to have insurance or other proof of financial responsibility. Assuming most readers will have some familiarity with auto insurance we’ll focus on some optional liability protections that may be very important, depending upon your financial and asset circumstances.

Perhaps the most prominent of these optional liability coverages is the insurance available on your home, co-op or condo. These insurances, in addition to covering forms of property loss also afford important liability protection designed to protect you if, to use a basic example, someone falls and is injured on your premises. Rather than invading your precious savings to pay a liability judgment, your insurance carrier pays.

Just as important, liability insurance (including automobile) usually provides “defense” coverage – the cost of an attorney to help defend and possibly settle the case against you. In fact, many cases are dismissed or settled for sums far lower than claimed in the course of the legal proceedings. The legal bill could possibly be the greatest part of the claim against you. Thus, this is in many ways the most important feature in a liability policy.

If you are asset poor, the need for such protection may not be as great as someone with substantial net worth and liquid assets. Still, someone might obtain a judgment against you which may be enforceable for many years, waiting patiently in the hope that your asset picture improves.

As with health coverage, liability insurance should be purchased with care – it’s important to make sure you are not overpaying – buying some fancy insurance with features of which you are unlikely ever to need. Also, it’s very important to understand a policy’s exclusions and to know the issuing insurer’s financial rating and reputation for paying claims.

Answers to these and other questions are available through several sources: Insurance brokers who may represent several carriers to the public should be able to help you compare coverages consistent with your current needs. Of course, there is a major on-line presence now, not only with detailed information on insurance types and coverage details but with financial ratings as well. On-line insurers issue coverage directly, not through brokers. It’s still important to compare price, regardless of the quote source.

Financial rating information is available through several sources including venerable industry provider A. M. Best as well as through Consumer Reports, among others.

Feel free to ask any questions, to comment, or to request more information in the Comments Box below. Also, please feel free to forward this blog to anyone you know who might be interested in its topic.

Sanford (Sandy) Balick, Attorney & Mediator in New York Sandy Balick signature
Sanford E. Balick, Esq.
Founder & Principal Mediator
Consensus Point Mediation, LLC.

Phone: (646) 340-3434
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