insurance
What is your liability if you hit a super expensive car?
<p>Assume you get in an accident that is your fault and cause $300,000 damage to a $1,000,000 Lamborghini. Your insurance pays up to $100,000 in property damage. Are you responsible for the remaining $200,000? What if it was a rare $10 million dollar car that was totaled (you just dented it, but the car is very fragile)?</p>

<h2>Liability</h2>

<p>The concept of liability for damages is to place the wronged party in the same position that they would have been in but for the wrongful act.</p>

<p>If restoring their car costs $300,000 then you are liable for $300,000. If the car is a total write off then you are liable for the cost of them getting an equivalent replacement, usually assessed at market value of the asset.</p>

<h2>Insurance</h2>

<p>Insurance is a different concept. An insurance company agrees to indemnify you for liability for your negligence within the limits of your policy: these usually include a deductable and a limit and sometimes a co-payment.</p>

<p><em>You</em> are liable to the wronged party - your <em>insurer</em> indemnifies <em>you</em>. If your insurance doen't cover all of your liability, you are responsible for the balance.</p>

<p>You are responsible for whatever property damage you cause, and if you do not have sufficient liability insurance to cover that damage, the injured party may sue you for the rest. None of the $10 million cars are very fragile and would not be totalled by tapping it at 10 mph, but let's say you creamed a 1961 Ferrari 250 GT California SWB Spider by plowing into it at 200 mph, then you could be liable for a large chunk of change. There is no provision in the law that says a person can only be held responsible for e.g. the first million dollars of property damage. Since it is impossible to extract blood from a turnip, you might not actually have to pay the whole cost.</p>
