Are you looking to purchase home insurance? If so, you may be wondering how some parts of it all work. Thankfully, we will help you get a basic understanding of how personal liabilities work.
In this article, we will talk about homeowners insurance personal liability. We will explain what it is in detail and why it is important to include it in an insurance policy. You may already have an understanding about another part of your insurance policy, the deductible.
The personal liability could also determine what kind of policy you can choose from. That choice could be based on a financial standpoint. The last thing you want to do is pay too much for homeowner’s insurance because of how the personal liability is set up.
Let’s talk more about it:
What Is Personal Liability?
To begin, let’s define what personal liability is. This is coverage that will protect you against the following: if you committed an act that resulted in bodily injury or property damage belonging to another person on your property, that is considered personal liability.
This coverage will also include the same incidents if they do not happen on your property. Either way, you could find yourself in legal trouble due to injury or damage you may have caused (even if it was unintentional). Personal liability coverage is usually included in most insurance policies.
What Situations Cover Personal Liability?
Let’s bring up a few example situations:
It’s wintertime. And the weather has left your driveway with a new coat of snow and ice underneath. A friend of yours decides to pop in for a visit.
Before he even reaches your front door, he slips and falls in your driveway. As a result, he suffers from a sprained ankle, but it has to be checked out by a doctor. Your personal liability insurance will cover his medical expenses , so you don’t have to pay a lot out of pocket.
Other scenarios include accidental incidents that can damage other people’s property. Your pet may even cause this damage as well. Either way, personal liability will cover you for any legal expenses that you may need to spend if such were to arise.
You will likely need a lawyer for such personal liability situations. The reason why being may be because you may not exchange insurance information. Thus, the other party will likely pursue legal action by consulting with their attorney (thus sending you a letter stating that said client is pursuing a claim).
The letter will state that you must provide your insurance information or face legal action within 30 days. At this point, you will need to file a claim and send the necessary information to the other party. Meanwhile, you must have your attorney’s information, so the insurance company communicates with them instead of you directly.
What Personal Liability Does Not Cover?
Granted, there is a line that has to be drawn somewhere. Now that you know what is covered under personal liability in your insurance policy, here’s what it DOES NOT cover:
● Property damage caused by your vehicle. That is covered under your auto insurance, NOT homeowner’s insurance
● Intentional damage to a person’s property or residence
● You or someone else covered under your policy intentionally inflicts injury on another person
● Someone is injured on your property, but the cause is no fault of your own
Usually, there is an awful lot of confusion about what is covered under personal liability and what isn’t. Because of this, many people who file a liability claim are usually denied since the situation may not be considered grounds for it. You may also be confused about which items or parts of the home are covered.
For example, let’s say you try to install a new medicine cabinet. During the process, you hit a pipe with a nail. While the walls damaged by water are not covered by your insurance policy, the furniture that is damaged from the ‘trickled down leaks’ will be.
Cover Your Bases with A Home Insurance Policy
When it comes to insurance, it is important to cover your bases. Especially when you find yourself in situations where damage or injury can occur. You could face legal trouble as a result.
That’s why you need to make sure that your insurance policy will give you peace of mind knowing you will be prepared. It may seem like ‘just another expense’ to add to the list right now but, given how many things can go wrong for homeowners, it will prove invaluable in any number of worst-case-scenarios.