Homeowners insurance protects you and your family for both your house and personal property in the event of property damage or loss of personal items. Typically, homeowners’ insurance policies have two components– property coverage and liability coverage.
Liability coverage indemnifies other parties who suffer injury, death or loss on your property—regardless of who is at fault. The coverage can be broken down into two sections: personal liability coverage and medical payments.
Personal liability coverage
If a person visits or a guest stays in your home, if he slips on the property and breaks his leg you can end up being sued. Your homeowners’ policy has a clause that provides liability coverage in case of a claim or you get sued and lose the case. The coverage also protects you against claims for damage to another person’s property.
The liability section of the homeowners’ policy also includes coverage to pay medical expenses for anyone accidentally injured on your property regardless of who is at fault. Injuries to you or family members are not covered.
Your personal liability coverage extends to you and members of your household even if you are away from home. Coverage does protect yo against liability or costs for automobile or business-related occurrences. The average homeowners’ policy provides a standard amount of liability coverage in the amount of $100,000 to $300,000.
Personal liability coverage can save you from lawsuits and the potential of huge losses. In fact, many people stand to lose more through lawsuits for liability than they would if their house burned down to the ground. The more assets you own, the more you have to lose.
Consequently, the need for adequate personal liability coverage grows in importance.
Consider umbrella coverage
In the United States, lawsuits are common. If you or a family member accidentally causes injury to someone or are at fault for property damage, you stand a good chance of being sued. If the court finds you liable, you could be subjected to a substantial jury award that exceeds the limits of your homeowners’ policy coverage. Without the proper amount of liability coverage, you could lose more as a result of a lawsuit than you would if your home falls to the ground.
To safeguard your hard-earned assets, consider purchasing “umbrella” insurance. This coverage supplements both your property and auto insurance policies to provide much more protection above the standard policy limits. This coverage automatically kicks in after a claim or an award exceeds the limits of you standard coverage
Your must already have certain limits on your auto and homeowners’ policy to qualify for an Umbrella policy. Consult with your insurance agent to determine the right amount of personal liability coverage based on your circumstances and assets.