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Does homeowners’ insurance cover injury liability?

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You host a party and someone falls on your property. The individual’s leg is broken and needs medical care. Now you’re wondering – does homeowners’ insurance cover the injury? In some cases, your home insurance policy may provide coverage, but it’s important to know the common exclusions, limitations and requirements. 

Homeowners’ Insurance and Personal Liability Coverage 

Many people buy homeowners’ insurance because they want coverage for the structure of their house. If your house is damaged by a covered peril, your home insurance policy will pay for the repairs, up to the policy limit. This coverage is important, but it’s only one piece of the protection that homeowners’ insurance provides. A standard policy also provides coverage for your personal belongings, additional living expenses and some liability protection. 

According to the Insurance Information Institute (III), the liability protection offered under a standard homeowners’ insurance policy covers the policyholder for lawsuits involving bodily injury or property damage that you, your family members or your pets cause to other people. 

This can include personal injuries, for example, if your dog bites the mail delivery person or if a guest falls on your property and you are considered negligent or otherwise responsible for what happened. The liability limit is often different from the limit for your house structure, and it may be significantly less. The III says that limits often start at around $100,000, but your limit may be higher or possibly even lower.  

What if your rent your home?

If you rent your home, you need renters’ insurance instead of homeowners’ insurance. Although your landlord’s insurance should cover damage to the structure of the building, your renters’ insurance provides important coverage for your belongings. Like homeowners’ insurance, it can also provide liability coverage if you are sued for bodily injury or property damage.  

When won’t homeowners’ insurance cover personal injury claims? 

Homeowners’ insurance only covers bodily injury liability claims, that is, claims involving a third party. If you fall on your own property, your homeowners’ insurance policy will not provide coverage. Likewise, if someone in your household is injured, you will not have coverage under your home insurance policy. It’s only if someone else is injured that you can file a homeowners’ insurance claim. 

Your homeowners’ policy may have other exclusions, as well. For example, most insurance policies exclude intentional and criminal acts. The criminal acts exclusion means you might not have coverage if, for example, you assault someone.  

Although homeowners’ insurance policyholders may have coverage for lawsuits related to animal bites or property damage caused by animals, many homeowners’ policies exclude certain breeds or dogs or types of pets. Exotic pets and dog breeds that are considered dangerous are especially likely to be excluded. 

Some other types of injuries won’t be covered because they should be covered under a separate insurance policy. For example, if you injure someone in a car accident, you should file a claim with your auto insurance company, not your homeowners’ insurance company. Homeowners’ insurance policies can also contain exclusions for commercial activities, so if you use your home for business purposes, you should make sure you have appropriate coverage. 

Medical Bills Coverage 

In some cases, your homeowners’ insurance policy may provide coverage for medical expenses to third parties without the need for a lawsuit. This can be advantageous for everyone involved because lawsuits are time-consuming and expensive. Additionally, you don’t have to prove fault when medical payments coverage is used, so the process is relatively simple and fast. 

However, the limit for medical payments may be much lower than your liability limit. For example, you might have a $100,000 liability limit but a medical payment limit of just $1,000 or $5,000. Nevertheless, this can be a good option for relatively minor injuries. 

Working With Your Insurance Company 

If someone is suing you because of a personal injury, you’ll need to work with your insurance company.  

Your insurance company will need to know about the claim as soon as possible. In fact, there may be requirements for prompt reporting in your insurance policy, and a failure to meet these requirements could jeopardize your coverage. 

It can also be helpful to collect any documentation that you can, such as photos and eyewitness testimony. For example, if the person filing the lawsuit is claiming that your negligence caused the injury, but you have evidence that the individual’s own recklessness caused the injury, you should provide evidence to support this. 

How common are personal injury lawsuits? 

According to Experian, liability claims only accounted for 2.8 percent of all homeowners’ insurance claims in 2019. These claims may include personal injury lawsuits as well as claims involving property damage and defamation. 

Personal injury lawsuits against homeowners are not incredibly common, but they do happen, and they can be expensive. In the U.S., medical bills alone can easily be for tens of thousands or even hundreds of thousands of dollars. If you are found negligent in someone’s injury, you could be responsible for lost wages on top of the medical bills. The claim could also include an amount for pain and suffering.  

A serious injury can happen in the blink of an eye: 

  • A child runs onto your property to pet your dog. The dog is startled and bites the child. 
  • Someone trips over a broken step or slips on a patch of ice on your porch and breaks a leg. 
  • You throw a party, and one of your guests falls down while drinking and dancing. The guest’s back is injured in the fall and has to undergo surgery. The guest is not able to work, so there are lost wages. 

What if you want more liability coverage? 

Some homeowners’ and renters’ insurance policies only provide around $100,000 for liability coverage. A lawsuit can easily exceed this amount, especially if a serious injury is involved. 

If you are sued for an amount that exceeds your liability coverage, you could be personally responsible for the difference. This means that your savings and assets could be in jeopardy if you are sued. If you want to protect your savings and assets, you may want to increase your personal liability insurance coverage.  

There are a couple of ways to do this. One option is to talk to your insurance company about raising your personal liability limits. This will probably cause your insurance premiums to increase, but it means you’ll have more protection if you are sued. Another option is to purchase an umbrella insurance policy. This is a policy that can increase the liability limits on your other insurance policies, such as your homeowners’ and auto insurance policies.  

Check Your coverage 

It’s often said that the U.S. is a litigious society. This may be true, but it’s also true that injuries can be very expensive. If someone is injured on your property, you could be responsible for the medical bills, lost wages and pain and suffering. Check your policy to see how your homeowners’ insurance covers personal injuries. If you think you need more personal liability insurance coverage, reach out to Higginbotham. 

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