When discussing and rating homeowner insurance policies,
personal liability coverage is often an afterthought. Insurance companies and insurance
agents don’t always take the time to explain
what it is and what it covers. Don’t fall into the trap of thinking personal
liability coverage isn’t important. It most certainly is!
For starters, let’s look at the types of claims that are potentially
covered by this part of the homeowner insurance policy: bodily injury claims
and property damage liability claims. It is quite common to see personal injury
coverage added to personal liability coverage via endorsement, as well. For the sake of discussion, we will include personal
injury coverage with the other liability coverages we mention.
So, what exactly does this cover? Let’s say you attend a
concert or sporting event and as you are leaving your seat you accidentally
trip someone. The person suffers injuries resulting from the fall down the
stairs. This could result in a bodily injury liability situation.
Or, let’s say you have guests over to your home and your dog
becomes spooked and nips at the hand of one of the guests. Provided your
homeowner policy doesn’t have a dog bite exclusion on it, this would
potentially be a covered bodily injury liability claim too.
Now let’s move on to the property damage component of
coverage. This isn’t coverage for your property. Rather, it covers damage to
someone else’s property that you or your family members cause. For example, if
your child accidentally hits a baseball or golf ball through the neighbor’s
window, that would be considered a property damage liability situation.
Lastly, let’s take a look at personal injury, which is easy
to confuse with bodily injury since the “personal injury” attorneys you see on
TV or hear on the radio are soliciting bodily injury cases. In insurance
terminology, “personal injury” most often refers to one of the following:
- Libel;
- Slander;
or
- An
oral or written publication that violates another person’s right of
privacy.
In today’s world of social media, this particular insurance
coverage can quickly come into play. Too often, people post their thoughts and
feelings on social media without giving much thought to potential
repercussions. A simple review or complaint about the products, goods, or
services from a business could turn into a lawsuit if the business alleges unwarranted
reputational harm and/or loss of business as a result of the online post.
One more important idea to consider: A simple way to enhance
your bodily injury, property damage, and personal injury liability coverages is
to purchase a personal umbrella policy.
“Umbrella” policies supplement your underlying auto and homeowners
liability coverage limits with additional protection of $1 million or
more. And that additional peace of mind
comes at a very reasonable monthly cost.
In summary, make sure that you are comfortable with your
personal liability limits of insurance. Don’t treat that important protection
as an afterthought when you are obtaining a new homeowner insurance quote or
reviewing the program you currently have in place. Liability limits and
coverages can be added easily, and they often come with a nominal price
tag. For good measure, add an umbrella
policy for an extra layer of liability protection that is in excess of your
homeowner policy personal liability limit!
Post authored by Marc McNulty. Originally published April
23, 2018. View original post at:
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