How Much Insurance Do I Need?

The law requires people operating vehicles on our roadways to carry a minimum amount of insurance to pay for the damage they may do to others. Responsible drivers know that their personal assets could be at stake if they don’t have enough insurance to pay for the harm they cause. Many vehicle owners mistakenly believe that if they have insurance – in any amount – that will be all the injured party can ever collect. That’s simply not true.

In Florida, we enjoy homestead protection, meaning our homes are safe from debt collectors who might otherwise try to take title to them or force us to sell them to pay our debts. But other assets are up for grabs. Savings accounts, cars, trucks, motorcycles, boats, personal watercraft, RVs, second homes – the equity in those assets could be used to pay judgments against you. This includes your interest in jointly-owned assets like businesses, vacation homes shared with another couple, or property you may own with relatives. If the other owners can’t afford to buy you out so you can pay your debts, the person you owe could force a sale of the property. The other owners would get their share, but your share would be used to pay your debt. So, if the harm you cause someone through your negligence is greater than the amount of insurance you bought, you risk losing those assets you inherited or worked so hard to acquire.

So how do you know how much insurance you need? It starts by understanding your exposure. An easy way to know this is by completing a personal financial statement, which you can easily find on the internet. On it you list all of your assets in all of their forms. They include cash, savings, money market, CDs, retirement accounts, shares in businesses, and all real and personal property. You then list your liabilities, including any mortgages, liens, promissory notes, etc. By listing these items individually, you can see how much equity you have in them and what your potential exposure could be, should you cause injury to someone else.

Once you have a firm understanding of your financial picture, you should consider the amount of insurance needed to protect yourself. Insurance isn’t cheap and the overwhelming majority of insureds never use it. No one wants to pay for a dime more than they need and frankly, carrying too much insurance could adversely affect the way you’re treated in the event you ever do have a claim. So you need as much as your financial picture dictates you need. For some, that may be $50,000. For others, that may be a $4 million umbrella policy on top of lower levels of coverage. An experienced, trusted insurance agent will consider your unique financial picture and advise you accordingly.

Keep in mind that just because you may not have collectible assets to satisfy a judgment against you right now, that may not always be the case. We all know at least one person who has won the lottery or received a windfall inheritance or life insurance proceeds. In addition, if you still have more years to work, especially if you have any sort of professional license, your future earnings could be attached in some circumstances. So it’s imperative that you consider your risk and work with a trusted insurance agent to protect yourself.

At Fasig Brooks, we want you to be protected. If you have any legal questions on any topic, contact us at or (850) 222-3232.