Liability: What You Need to Know – My Financial Wellness Guide – Part VII
If you’ve been following me for awhile you know that I focus quite a bit on self-awareness. Being financially healthy is contingent on knowing yourself and developing a strong sense of personal responsibility. Our words, actions and behaviors have a direct affect on the people we interact with every day. That also includes our lack of actions, words and behaviors.
By choosing to live within our communities, we accept the reality that we are bound by certain laws, social expectations and cultural behaviors. Part of being a good neighbor is doing whatever is within our ability to minimize the risk of injury or damage to other people and their property. It takes a conscious effort to consider the wellbeing of others and put measures in place to protect yourself in the event something does happen.
That’s where liability insurance plays a big role. Liability means that you are responsible, accountable or legally encumbered for the results of an event – whether your involvement was intentional, due to negligence or completely without your knowledge. This is one area where you don’t want to be naive or trust in the goodness of others.
Liability is one of the primary reasons to have a Renters Insurance policy as soon as you strike out on your own. It provides a basic level of protection in the event someone is injured or you cause damages to another person’s property. From dog bites to water damages to someone tripping over your bike – even a minor claim could put a big dent in your finances.
Liability is the primary reason every driver is required by law to be covered by auto insurance. Even slow moving vehicles can cause significant damage and injuries. Your auto insurance policy even protects you from irresponsible drivers that do not have insurance. Be sure to read your policy coverage’s and understand how it works in your specific state and always file a police report to make an official record of any accident.
As your needs change over time, consider adding an Umbrella Personal policy for your protection. It provides additional protection above and beyond any other insurance you have. You should definitely have an Umbrella policy if you are self-employed or own your own business. This is when you need to have a trusted insurance advisor to explain the best options to minimize potential risks. Be sure to interview several and find someone who is knowledgeable in their field.
Be well and stay strong on your journey towards financial wellness.