What is liability coverage on your homeowners insurance policy?
Liability coverage is a key component of any homeowner’s insurance policy. It covers you against lawsuits brought against you.
What does liability coverage cover on your homeowners insurance policy?
The list of things that someone can be sued for is endless. Liability coverage can help cover you for lawsuits brought against you for property damage or injury for things that you caused or are negligent for.
Think of someone falling and tripping on your unmaintained wood deck, they have injuries and they bring a lawsuit against you because you were negligent in not keeping up on the maintenance of your wood deck. Things like medical bills, lost wages, pain and suffering, are all things that you can be sued for, and these are things that typically fall under personal liability coverage on your homeowners insurance policy.
What does liability coverage not cover?
The most important thing to understand is that you have to actually be liable or negligent in order for a lawsuit to be brought against you and for your liability coverage to kick in. Self inflicted harm is something that is generally excluded from the policy as well. Personal liability coverage does not pay out for you, the homeowner or your immediate family living in the house.
In other words, your son can’t go out and get hurt and then sue you because you’re negligent, your homeowners policy will not give you coverage under liability for that scenario.
Do you need liability coverage on your homeowners insurance policy?
Yes, you absolutely need liability coverage on your homeowners insurance policy.
In fact, it is one of, if not the most important coverage on your homeowners insurance policy. Think of all the things that can go wrong and that you can be sued for not having coverage for. That can be a financial disaster. Personal liability coverage is an absolutely necessary coverage to have on your homeowners insurance policy.
How much liability coverage do you need on your homeowners insurance policy?
Generally the smallest amount that comes automatically on a homeowner’s insurance policy is $100,000 in coverage. That is not enough coverage. We recommend at least 300,000 but we push all of our clients to purchase $500,000 of coverage. On top of that, we encourage all of our clients to purchase an umbrella policy to give them even more coverage on top of the $500,000
In coverage. Again think of all the things that can go wrong and how quickly $100k, $300k, $500k can go if you are being sued for a serious accident that occurred and you were negligent for.
How much does liability coverage cost on your homeowners insurance policy?
As almost with all coverage it depends, it depends on your home, where it’s located, the age of the home, how large it is, who lives in the home?
How many kids live in the home. We also talk about things like do you have a pool, do you have a diving board, do you have a trampoline, those things offer more expo closure, more risk exposure things can go wrong when you have more of those things, and so the price may increase.
But as always it’s best to consult with an independent insurance broker, they can take a look at your specific scenario and then craft a policy that is the best fit for you both in terms of price and in terms of coverage.