We live in a litigious society with nearly 15 million lawsuits being filed every year – and it’s not just the big business or the rich who are sued. Everyday people are filing lawsuits or are being sued, and on average, 55% of the plaintiffs win their case. This can be a concerning issue for any homeowner, especially when inviting others over for a party or dinner. If someone is injured on your property, even just a friend who trips on your front steps, they have grounds to file a lawsuit against you. This is why it is so important to have homeowner’s insurance (or renter’s insurance if you are renting your home).
About Liability Coverage
Most homeowner’s and renter’s insurance have a personal liability policy to help protect you in the event you are sued. The standard coverage amount is $100,000 in a personal liability policy; considering that the average lawsuit settlement is around $90,000, this coverage limit is perfect for most homeowners or renters. Your personal liability coverage will cover your legal expenses, awarded medical payments, and other settlement payouts up to your policy limit.
In the event that the awarded settlement exceeds your policy limit, you will be held responsible for the difference. To increase your policy limit, you can purchase additional protection in the form of an umbrella insurance policy. Umbrella insurance will extend your policy limit and in some cases, widen the areas of coverage.
What Your Insurance Will Cover
Always review the fine print of your policy or go through it with your insurance agent to ensure you have the coverage you need to protect against a personal liability claim. Each basic policy can vary depending on the insurance provider, however, many insurance providers usually cover the following:
Injuries on Your Property: If someone is injured while on your property as a result of your negligence, your home owner’s insurance would likely have to pay for medical expenses or any settlement amounts awarded if you are sued for further damages.
Dog Bites: If your dog bites a guest, or the mailman, most policies will cover expenses related to these injuries. Although, pet coverage may be an additional fee or may exclude certain dog breeds from coverage.
Damage to Other People’s Property: If you are the guest in another’s home and damage one of their belongings, you can make a claim against your homeowner’s insurance to cover the expense of the damages.
Injuries Off-Property: Homeowner’s insurance also follows you when you are away from your home, so if you crash into someone while on your morning bike ride, your homeowner’s liability protection rides with you.
What Your Insurance Will Not Cover
Certain Dog Breeds: As mentioned above, a particular dog breed may disqualify you from liability protection. Check with your insurance provider for their list of exempt breeds before purchasing coverage or getting a new dog.
Intentional Acts: Any act conducted by you or a member of your household that is considered intentional, willful, or malicious is automatically considered exempt from coverage.
Damages Caused by a Vehicle: Accidents with damages or injuries involving a vehicle will fall under your auto insurance coverage, not your homeowner’s insurance coverage.
Damages Incurred While Conducting Business: If you run a business out of your home, you will need to purchase additional business insurance to cover liability from injuries that are sustained on your property.