UPDATED: Aug 20, 2013
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In addition to protection for your physical property, homeowner’s insurance also offers liability coverage that can protect your assets from litigation under certain circumstances. Unlike auto liability insurance, which is designed to pay for very specific types of situations, homeowner’s liability coverage is designed to be very inclusive to cover a variety of potential claims.
The purpose of liability insurance is to pay for medical expenses or property damage for individuals who are outside of your family. In other words, if you cause any damage or harm to another person or their property, your liability insurance can pay for that damage and protect you from a lawsuit. This can include both personal injuries and damages to other people’s property on or off your premises.
Common Homeowners Liability Insurance Claims
There are a few common claim types made against personal liability policies:
– Injury claims for people who trip and fall while visiting your property
– Injury claims for people who are bitten by your pet on or off your property
– Damage claims caused by your pets or young children
– Damage claims caused by your property, such as a falling tree limb
What it Covers
Personal liability policies may not necessarily cover every type of claim which could be filed against them, but they provide a good general layer of protection between you and litigation. Be aware that liability insurance will only cover situations that are accidental; you cannot use your homeowner’s policy to pay for damages or injuries that are caused purposefully. You also cannot use this coverage to pay for the medical expenses of anyone living in your home.
For example, imagine that you have aging relatives come over for a holiday dinner. While there, a relative slips on your stairwell and injures their hip. This injury could be covered by your homeowner’s policy. If, however, your grandmother lives with you full-time on the property, an injury to her hip would not be the best time to file a homeowners insurance claim. This is because you cannot be held liable to yourself, and another type of insurance, such as health insurance, is expected to cover that expense.
Not every homeowner’s policy automatically includes liability insurance, so you should check with your insurer to confirm whether you carry this coverage and what its limitations may be. If you have substantial assets to protect, consider purchasing an umbrella policy, which is a more advanced type of liability insurance that can further protect you and your family.