Liability insurance is insurance that pays for the damage that you do to others or that others do to themselves on your property. Example: you are held responsible for a car accident in which somebody is paralyzed. If you are insured, you will not pay for that person’s medical expenses, lost income and care. If you’re not, or you’re carrying too little, the things you own will be put at risk. You could be sued and pay for that person’s injury for the rest of your life. To prevent this, get enough liability coverage at least to equal your net worth. Imagine the difference that a little extra payment can make!
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