Liability Insurance Coverage and You: Why You Need Good Coverage

Jun 11, 2020 | Insurance Issues

Say your 18 year-old son is away at college, and you gave him one of your old cars so he could drive to and from school, and to get groceries and run errands. Unfortunately, as he is on his way to pick up a pizza a few blocks from his dorm, he crosses the center line while he was distracted by his cell phone, and he seriously injures another driver. That injured driver then sues your son, and she also sues you for her injuries.

“But wait!” you exclaim. “I wasn’t driving the car, my son was! I can’t be sued when I wasn’t even in the same zip code as where the collision occurred!” Right?

Wrong! Under Michigan law, vehicle owners are just as liable for serious injuries caused by any driver of a car they own as the driver is, so long as the car was used with the “express or implied consent or knowledge” of the owner. Here, because you entrusted the car to your son, you are 100% liable for the injuries he caused—just as if you were the driver instead of him.

This is where you automobile liability coverage comes into play. Your insurance company not only will hire an attorney to defend you in the lawsuit, but they will pay money to the injured person to resolve the case, up to the limits of your insurance coverage. And if you have good coverage limits, you won’t have to worry about losing your assets to an excess judgment against you, or having to file bankruptcy.

To protect yourself and your family, we recommend that you contact your insurance agent today to make sure you have at least $500,000 in liability insurance coverage on your automobile policy—more if you can afford it.

(Also see our related article on uninsured and underinsured coverage, “Michigan Drivers: Don’t Make This Mistake”)