Having homeowners insurance to protect your property against physical damage is essential, but it also provides essential reimbursement for covered lawsuits. The liability insurance coverage in homeowners insurance can help you get the reimbursement you desperately need if you are sued by a third party. But ensuring you get set up with enough coverage before an incident ever occurs is key.
An independent insurance agent can help you get set up with the right kind of homeowners insurance and amount of liability coverage for you. They'll make sure you have enough personal liability homeowners insurance protection against many kinds of lawsuits. But first, here's a closer look at homeowners liability insurance.
Why Liability Protection Matters
A homeowner's responsibility is to keep their property safe for guests and other visitors, as well as their own family. But did you know that homeowners can even be on the hook for injuries to someone who trespasses on their property if it's found to have been unsafe? It's true.
Homeowners can be held liable for any dangerous conditions they fail to repair, such as shaky stairways and slippery sidewalks. They can also be held responsible for injuries that occur due to leaving property on the ground, such as ladders and equipment that can be tripped over. But possible liability doesn't stop there; homeowners are also responsible for many injuries and property damage caused by their pets.
What Is Homeowner Liability?
"Liability" can be defined as “a legal or financial obligation.” As a property owner, you're legally responsible for making sure the premises of your home and property are safe, and you can be held accountable if disasters like injury or property damage happen on your property, whether due to oversight or negligence.
Typically, you will only be held responsible for an accident, injury, or property damage if you are in some way negligent or if you have failed to ensure that your home and property are safe for visitors. You must be certain your sidewalks and steps are not icy, that there are no tripping hazards, and that a person walking across your yard wouldn't trip due to a gopher hole.
If your home is under construction or if you have a landscaping project in progress, you can be held liable for harm to others who are harmed by the equipment and tools. As a homeowner, do everything you can to keep your home and property safe and ensure you have adequate coverage for unforeseen incidents. That's where homeowners insurance personal liability coverage comes in.
What Is Liability Insurance for Homeowners?
The personal liability coverage in homeowners insurance can reimburse you for expenses related to covered lawsuits. Third parties may sue you for bodily injuries or personal property damage.
In such an instance, your homeowners liability insurance could pay for attorney and court expenses or other costs related to the lawsuit. You may have heard the terms "bodily injury liability homeowners insurance" and "property damage liability homeowners insurance," which refer to the types of lawsuit claims your policy can cover.
Liability coverage is a component that's included in standard home insurance policies. Due to the high risk of being sued, homeowners insurance coverage comes with critical protection against these potentially extreme expenses. Should you face a lawsuit, homeowners insurance can help you get back on your feet thanks to its liability coverage.
What Does Homeowners Liability Insurance Cover?
The liability coverage section of your homeowners insurance protects your financial assets if you or another member of your household is sued and found to be legally responsible for bodily injury or damage to another person's property.
Homeowners liability insurance can cover:
- Repairs to another person’s property
- Medical treatments for an injured third party
- Legal defense costs for lawsuits related to third-party property damage or bodily injury
- Attorney, court, and settlement expenses
Also, depending on the specifics of your policy, you may be covered for defamation if you have personal injury liability homeowners insurance. Under other circumstances, personal injury coverage may be available if you add a separate endorsement to your home policy.
Common Homeowner Liability Insurance Claims
Some of the most common injuries for which homeowners are sued are slips and falls, which can occur due to wet floors, icy sidewalks, objects on the ground, and many other scenarios. Dog bites are another common and expensive liability claim many homeowners face. Additionally, injuries and accidents involving a swimming pool on your property are very common.
Fortunately, a standard home insurance policy includes liability protection that can help cover all of these common incidents and related lawsuits. A local independent insurance agent can help ensure you're set up with all the slip and fall homeowners insurance, dog bite liability homeowners insurance, and swimming pool liability insurance for homeowners you need to protect yourself against the cost of these disasters.
Homeowners Liability Coverage Protects You From Potentially Huge Financial Losses
The assets your homeowners liability insurance is designed to protect include the following:
- Liquid assets such as checking and savings accounts
- Investments
- Retirement accounts
- Valuable personal property
- Your home itself
- Any other properties you own, such as vacation homes
The nature of litigation today is that your financial assets can all be at risk if you get sued. Make sure to work with an independent insurance agent to get set up with an adequate amount of liability coverage to protect your assets ahead of time.
What If I Don’t Have Enough Liability Coverage?
If someone gets injured or suffers property damage on your premises or as a result of negligence on your part, you might need to use your liability coverage to pay for lawsuit costs or medical treatments. A simple settlement could involve you just filing a claim through your home insurance to pay for the third party's medical treatments, property repairs, or replacements. However, in the case of an extreme disaster like a severe injury at your home, it's critical to know you're fully protected with high enough liability insurance limits under homeowners insurance.
Your homeowners insurance comes with a liability limit set at the time you purchase your policy. A common liability coverage limit in standard home insurance policies is $100,000. If someone files a large lawsuit against you, your legal defense and settlement costs can potentially exceed this coverage limit. Then, your other assets could be at risk, including your home, savings, and investments.
If you feel this limit isn't sufficient for your unique property and potential risk factors, fortunately, there are ways you can increase liability coverage in homeowners insurance. Having homeowners insurance with high liability coverage can help ensure you can receive full reimbursement for hefty lawsuits that may otherwise lead to large financial setbacks, even including bankruptcy.
You can increase your homeowners liability coverage in one of two ways:
- Increase the amount of coverage in your homeowners policy: For example, from $100,000 to $300,000 or $500,000. The cost of increasing homeowners liability coverage is typically very affordable.
- Buy an umbrella insurance policy: Umbrella insurance is a separate policy that adds additional liability coverage to an existing policy. One type of coverage umbrella insurance works with is homeowners insurance. Umbrella insurance typically comes with liability coverage in increments of $1 million.
You can also ask your independent insurance agent about increasing your homeowners liability coverage limit if you're concerned you don't have enough. They can recommend the course of action that would make the most sense for you based on your personal risk and assets.
When to Consider Adding Umbrella Insurance
You may be wondering about the difference between umbrella insurance vs. personal liability insurance found in a homeowners policy. An umbrella insurance policy provides extra liability protection for your current assets and future income if a large legal claim exceeds your homeowners liability coverage or auto insurance liability coverage.
While your home insurance liability coverage would reimburse the costs of medical expenses, property damage, and legal claims up to your policy's limit, an umbrella policy would provide protection up to a limit of $1 million or more.
Umbrella policies are also often highly affordable, especially given the amount of coverage they provide. Evaluate your risks and the assets you want to protect to determine how much liability coverage you really need. Have this amount already calculated before you shop for umbrella insurance to ensure a smooth and efficient process.
Why Work with an Independent Insurance Agent?
Independent insurance agents are experts in finding you the best homeowners insurance for liability protection and any other type of coverage you need. They can shop and compare policies from many different local insurance companies for you, then present you with only the best quotes together in one place.
Your agent will help you buy homeowners liability insurance with the appropriate amount of coverage for your unique needs. Also, your agent will still be available down the road to help you file home insurance claims or update your policy as necessary.
Sources
https://www.berryinsurance.com/blog/personal-injury-vs-liability-video
