This is part two of our post answering the question, “How much home insurance is enough?”
As a homeowner, you can be held liable for the negligence of family members and pets in your household, as well as injuries that occur on your property. Personal liability is the section of your home insurance that protects you against losses caused by lawsuits. It typically covers third-party injuries and property damages at your home, as well as the accidental damages you or a family member cause while traveling away from home. With a few exceptions for events like car and boat accidents, personal liability will generally cover third-party damages caused by a wide range of incidents. Examples include:
- If your dog bites another pet in your neighborhood
- If a party guest trips and falls down your stairs
- If your child accidentally hits a pedestrian with her bicycle
- And much more
Personal liability is generally included as standard coverage in most home insurance policies, although limits vary depending on how much coverage you select. It is important to note that lawsuits can cost tens or even hundreds of thousands of dollars for third-party damages and legal fees. Without adequate coverage, you might have to pay for those losses out-of-pocket.
As the owner of a home, you assume responsibility for the safety of the guests who visit it. Medical payments coverage helps pay for medical bills when someone is injured on your property, even if you are not at-fault for the accident. The coverage is usually low, between $1,000 and $5,000, but it is often enough to cover minor incidents, such as a sprained ankle or a doctor’s visit.
Many homeowners use endorsements to modify the standard benefits of their HO-3 or HO-5 insurance policies and make them more suitable to their needs. For example, one of the most frequently purchased endorsements is for replacement cost coverage for personal belongings that are damaged or lost due to a covered event. With this endorsement, homeowners are compensated for the value of a new replacement item – not the depreciated, actual cash value of the loss.
Another endorsement that is becoming more popular is the Personal Injury endorsement. The Personal Injury endorsement adds coverage for liable, slander defamation of character, false imprisonment or arrest among other related actions. Facebook comments or comments at the workplace have generated many expensive liability cases.
Other common home insurance endorsements include:
- Scheduled coverage for valuables
- Water backup and sewer protection
- Home business coverage
- Inflation guard
Beyond Home Insurance
At Wheaton Insurance, we encourage our clients to consider every possibility when shopping for coverage. For many, that means purchasing supplemental liability insurance that will pay additional benefits beyond the limits available from a home insurance policy. If you ever face a million-dollar lawsuit, which is common for accidents that result in severe disability or loss of life, having adequate coverage could mean the difference between your family’s financial security or financial ruin.
Umbrella insurance fills this gap, providing extra protection against lawsuits – usually a minimum of $1 million or more. In many cases, homeowners can acquire an additional $1 million of liability protection for just $200 per year or less. For more information or to request your free quote, contact our office today.