Maybe you should have blamed the postman. After all, if he hadn’t put your neighbor’s mail in your box, you’d have never walked over there. And if you hadn’t walked over there, you never would have grabbed that broken stair railing. And if you hadn’t grabbed that broken stair railing, you wouldn’t have fallen, shattering your elbow when you landed. Luckily, your attorney told you, your neighbor has a good home insurance policy, with adequate personal liability coverage to handle your lawsuit. It makes filing a lawsuit a little more palatable. But by the same token, the situation has you thinking: What if the situation had been reversed? Would I be covered if someone gets injured on my property? What is covered under a standard homeowners policy?
Standard home insurance policies typically include six types of coverage:
- Dwelling coverage protects the structure of your house from such specified perils as wind, hail and fire.
- Other structures coverage protects other buildings on the property, including detached garages and sheds.
- Personal property and contents coverage protects what’s inside your home – your electronics, clothing and other possessions.
- Loss of use coverage helps pay your expenses if you must relocate while your home is being repaired, after being damaged or destroyed by a covered peril.
- Medical payments coverage helps if someone is injured on your property and decides not to sue. This part of your policy will cover medical costs.
- Personal liability coverage provides protection if you or a member of your household causes an injury or property damage to another and they bring a lawsuit against you. This portion of your policy covers legal fees, court costs and any money awarded to the victim- up to the limits in your policy.
Why add the personal liability coverage limit?
Remember, you’ll still be responsible for any damages against you that exceed your liability limit. That $100,000 limit can be eaten up pretty quickly – particularly if a jury decides to award punitive damages in addition to medical expenses, lost wages and legal fees. That’s why many homeowners bulk coverage up to $300,000 or even $500,000. If you’re still not satisfied that you have enough coverage, you can purchase a personal liability umbrella policy.Face it: An accident can occur on your property at any time. Think about the toys that your kids leave in the driveway or potential hazards that could crop up without your being aware of them.
Remember, you didn’t want to sue your neighbor for his mistake, and someone who has an accident on your property might not WANT to sue, either. That doesn’t mean it won’t happen. You should take steps to be fully prepared if it ever does. The Insurance Information Institute (III) recommends that you review your policy every six months to make sure it still meets your needs. Now might be the perfect time to review your personal liability coverage and evaluate whether you’re covered as well as you should be.