Personal Liability Insurance

Often when we think of the perils that come along with home ownership we think of natural disasters, theft, fire, flood damage and so on. But have you thought about the impact of a personal liability claim?

A standard homeowners policy usually provides some level of personal liability insurance but it’s important to understand the limits of standard coverage and what is at risk when liability coverage is lacking.

Personal liability insurance falls into a category known as third party coverage. That means that it provides protection for claims made against you by a third party.  In the case of a liability issue your insurance company would be responsible to either defend you or pay a claim on your behalf.

Under a standard policy liability payouts are usually per occurrence and are considered incidents which results in physical injury or property damage to a third party or third parties and can range between $100,000 – $300,000 per occurrence. The fine print to notice here is that this is limited per incident, not per person. Meaning that whether one person was injured on your property or ten people were injured on your property during one occurrence the payout limit is the same.

While policies tend to be as thorough and clear as possible, this is a tricky topic to understand. So spend some time carefully reviewing your policy, its coverage, and its limitations.

When considering how much liability coverage you need take into account the risk factor as compared to the cost of additional coverage. For example, if you live a fairly introverted lifestyle and rarely have guests over then you are less likely to have a personal injury claim than someone who often hosts gatherings. Also, consider what threats your home presents, do you have a pool? A rooftop garden? Do you live in close enough to your neighbors that if a tree falls from your property it will land on theirs?  Do you live in a complex or apartment building where a leak within your home can affect a unit below you?

If you find you lack the coverage you need, consider an umbrella policy in addition to and in conjunction with your standard policy. Often times umbrella policies really do offer you more bang for your buck, so speak with a professional today about what you need and how to best go about reaching your goals when it comes to being a responsible homeowner.