What do pools and trampolines have in common?
Both can be major home insurance no-no’s when it comes to property damage liability. It’s not uncommon for insurance carriers to forbid homeowners from having uncovered pools or owning trampolines.
While it may feel like insurance companies are being unfair, the truth is they’re doing their best to look out for their policyholder’s well-being. By lowering a homeowner’s risk of ever having an injury take place on their property, they lessen the chance that you’ll have to deal with messy legal proceedings.
Still, sometimes accidents happen, no matter how safe the homeowner is being. Luckily, your home insurance policy can help save the day, even if the accident’s completely your fault. Read on to find out how liability coverage can protect you and your family.
Home Insurance Policy Coverages
Before we dive into how property damage liability coverage works, let’s first take a moment to explain how homeowners policy protects you financially. Your home insurance policy covers a wide variety of items.
Here’s a quick overview of the different types of coverages your homeowner’s policy should have:
- Dwelling protection
- Others structures protection
- Personal property protection
- Liability protection
When you’re creating your insurance policy, it’s important you fully understand each of these coverages and how they operate. The dwelling protection covers your house, while other structures will provide coverage for anything not attached to your home.
Your personal property is the things inside your home that you own, like furniture, appliances, and jewelry. Finally, we come to the liability protection. This is the protection that will help keep you safe both financially, and legally.
Companies like, exactimate estimating, help policyholders make sure they’re getting the right type of payouts when claims occur. Of course, before you can file a liability claim, you’ll first need to fully understand when this coverage applies.
Understanding Property Damage Liability
Liability coverage protects you against any lawsuits that arise for bodily injury or property damage. The incident has to be the fault of you or one of your family members, to another individual who’s not a member of the household.
Liability coverage also covers damage or injuries that result from something one of your pets did. Also, keep in mind that the damage doesn’t have to take place on your property for your policy to kick in.
For example, if you had a dog that damaged the neighbors’ belongings in some way, your liability coverage could cover the expenses. There are also home insurance policies that will allow your coverage to extend to places you’re staying in, while away from home. If you accidentally ruin something at the hotel you’re staying in, you could potentially file a liability claim to cover the damages.
Overview of Coverages
Now, let’s look at how your liability coverage will help protect you as a homeowner. Here’s a shortlist of all the different types of coverages that liability can cover:
- Medical bills for visitors
- Pain and suffering
- Lost wages
- Death benefits
- Legal costs
- Away from home coverage
- Legal costs
The medical bill portion will cover bills that arise because a guest accidentally gets hurt at your house, and you’re liable. If you don’t have high enough liability limits, you could wind up paying for all of your guest’s medical bills out of pocket. If someone loses their life on your property, and you’re held responsible, your liability coverages can help cover their death benefits, even if the guest has death benefit coverage of their own already.
How Liability Works
Your liability coverages only activate if the accident is something you’re liable for. To be liable for an injury or damages, they have to be the result of something you either did or didn’t do but should have.
If there are unsafe features of your house or yard, that you knew about, and a guest hurts themselves as a result, you could be in a world of trouble. Luckily, with the right coverages in place, you won’t have to go broke covering expenses and handling legal fees. Let’s look at 2 examples that outline when you are liable, and when you aren’t.
1. When You’re Liable
Imagine having a guest over to see your house one afternoon, and while going through your garage a paint can sitting on the edge of a shelf, falls off and strikes them in the head. In this event, you’re liable, since it was negligent of you to leave the paint can in an unsafe way. If the guest decides to sue you for any injuries, your liability coverage will be there to protect you.
2. When You’re Not Liable
Let’s say a guest in your home, goes into your garage and decides to climb a ladder. While climbing the ladder, your guest loses their footing, and falls, breaking their leg.
In this incident, you’re not liable at all for the damages. The guest’s fall was their own fault, and their health insurance will have to help cover their costs.
When Coverages Don’t Apply
Your liability coverages won’t apply if you aren’t liable for the damages. Other incidents don’t qualify as liability claims.
Here’s a quick overview of incidents where your liability coverages don’t apply:
- If you’re not liable
- When a family member sustains the injury or damage
- Intentional harm or damages
- Car accidents
While liability coverages will apply for accidents, the injury or damages have to happen to someone that’s not a member of the household. If someone who lives in your house intentionally harms someone or causes damage to their property, your coverage won’t apply.
For example, if someone got in a fight with their guests and caused them bodily harm, liability coverages won’t help pay for any injuries. If the guests decide to sue, the homeowner won’t be able to rely on their insurance policy to be in their corner.
Know Your Policy
Understanding how property damage liability works empower you as a homeowner. We hope that you’ll use this information as you review your policy to ensure you’re carrying the right limits.
Whether you’re looking to buy, sell, or expand your real estate knowledge, we’re here to help. Check out our other Home based articles we have, tailored made for homeowners just like you!