You’re on your way to work. You’re running behind schedule. You decide to run a yellow light. But just before the intersection, the light turns red. You slam on your brakes, but it’s too late. You broadside another vehicle. The driver is taken to the emergency room, undergoes surgery, and spends a month in the hospital. Following his release, he spends two years in rehabilitation, in and out of physical therapy, missing two years of work. His medical bills come to $100,000, but your potential liability depends a lot on what his occupation and income is. Here are a few examples. Note that awards for pain and suffering are also influenced by a person’s income loss. The total award for each example includes the $100,000 in medical expenses each incur.

• If he’s a teacher, his lost wages for 2 years might be $120,000, his pain and suffering might be $300,000, and his total claim (including the $100,000 of medical expenses) might be $520,000.
• If he’s a banker, his lost wages might be $240,000, his pain and suffering might be $400,000, and his total claim might be $740,000.
• If she’s a doctor, her lost wages might be $600,000, her pain and suffering might be $500,000, and her total claim might be $1,200,000.
• And if he’s a professional baseball player, his lost wages might be $12 million, his pain and suffering might be $10 million, and his total claim might be $22,100,000!

Pretty eye-opening, isn’t it? Can you imagine what the numbers would be if the driver were killed, or had a permanent disability with a life-time loss of income? The most common liability limit I see when I review a prospective client’s insurance is $100,000! As these examples illustrate, that’s ridiculously low.

I’m not suggesting that you rush out and buy $22 million or more in liability insurance in case you happen to hit a professional athlete. (You probably won’t even be able to find liability insurance with limits more than $5 million to 10 million.) I am suggesting that you reevaluate your cover-age limit based on a combination of this new awareness, the cost and availability of higher insurance limits, and how suable you are. To help pay for the increased cost of higher liability coverage, shift premium dollars away from less important coverages, like higher deductibles on coverage for damage to your own vehicle.