This is part two of our post answering the question, “How much home insurance is enough?”
Coverage E – Personal Liability
Liability coverage is an important part of your home insurance policy, even if it seemingly has nothing to do with protecting your home. Personal liability insurance helps pay for your financial responsibility if you are at-fault for another person’s property loss or accidental injury. This could be due to an incident occurring on your property or due to the negligence or actions of members of your household. Though the insurance pays the injured party for damages, it ultimately protects you – the homeowner – against financial loss.
In most cases, personal liability coverage follows you and the members of your household both in your home and away from it. However, there are certain exceptions for events like car and boating accidents, which are typically covered by separate insurance policies. Examples of commonly filed personal liability claims include:
- Dog-related injuries
- Slip-and-fall accidents
- And more
Coverage F – Medical Payments
If a guest is injured on your property or inside your home, don’t wait for a lawsuit to cover the medical bills. Medical payments coverage helps pay for necessary medical expenses due to third-party injuries occurring at your home. Although this coverage is not contingent upon your fault in an accident (it pays regardless of fault), it also does not absolve you of liability for injuries. However, having between $1,000 and $5,000 of medical payments coverage may be just enough to pay for a doctor’s visit or a health insurance deductible and potentially deter an injured party from filing suit.
Optional Coverage – Endorsements
If you find that the standard coverage on your home insurance still falls short of meeting your needs, talk to your agent about adding endorsements to your coverage. Insurance endorsements provide extra protection above and beyond that which is covered by the policy by default. Some endorsements are recommended for nearly everyone, such as water backup and sewer endorsements. Others may be suitable for a narrower group of people, such as a home business endorsement.
Additional examples of common home insurance endorsements include:
- Inflation guard protection for your home’s dwelling
- Scheduled coverage for high-value assets
- Replacement value coverage for personal belongings damaged due to a covered event
Beyond Home Insurances
What happens when liability damages exceed the limits of your home insurance policy – even if you chose the highest limits offered by your insurer? Though rare, these are the types of scenarios that can lead to financial ruin – unless you have supplemental liability insurance. Many homeowners choose to purchase an umbrella insurance policy that provides additional liability protection in excess of the limits of the home insurance policy. That means that if you are sued for $750,000 and only have $300,000 of available liability coverage, your umbrella policy may cover the remaining $450,000, leaving you financially unscathed.
A $1 million umbrella insurance policy often costs just $200 per year or less. For more information or to request your free umbrella insurance quote, contact our office today.