Homeowners Policies and Exposures: Extra Protection for Personal Liability

October 19th, 2017

Personal Liability: What You Need To Know

Most standard homeowner policies provide coverage for your dwelling, other structures, personal property and loss of use. However, personal liability may or may not be included.

Personal Liability provides coverage for bodily injury and property damage claims (other than vehicular related) which you are liable, thus helping to protect you against large financial losses. Standard liability limits found on homeowners and renters policies generally start at $100,000 with optional limits up to $1,000,000 or higher depending on the type of policy you have ( HO3 or HO5). Most policies cover the costs of defending you in court, in addition to the damages awarded by the court(s), up to your policy limit. The defense coverage ceases once the damages have met the policy liability limit.

The following are examples of claims filed under the Personal Liability coverage:

• Your dog bites a guest or neighbor causing bodily injury.
• A friend falls off your child’s bunk bed while spending the night or playing, causing bodily injury which requires medical attention.
• A friend slips and falls down your stairs which causes injury and lost wages while recovering.
• A guest sustains injuries while swimming in your pool.

Personal Liability coverage also extends to some events that occur outside of your insured location.  Examples of other potential covered loss might include:

• While skiing or snowboarding down your favorite slope, you fall and hit another skier, injuring them and requiring medical treatment.
• While on vacation, you accidentally leave a candle burning in the hotel room which ignites the draperies, resulting in significant property damage to the hotel room.
• Your son or daughter injure another person while playing basketball with a group of friends.

Personal Liability coverage is broad and it does not cover the following:

• Liability resulting from an automobile accident. Auto-related exposures are covered under your auto insurance.
• Bodily injury or property damage caused intentionally by you or a family member in your home.
• Injuries or damages sustained by you or a family member in your home.
• Business activities or claims related to your profession or in-home business.

Carrying adequate Personal Liability Limits is perhaps the most commonly passed over coverage on a Homeowner policy. The cost to protect yourself is very reasonable and the coverage is invaluable in the event of a claim in which you are held liable. Depending on where you live, your state laws may allow the court to garnish your wages and assets (current and future) until restitution is made to the injured party. In most cases, there is no time limitation for restitution payments, leaving you with the possibility of having your wages garnished for years to come.

Still think you don’t need to carry adequate liability limits just because your current wages and assets are negligible? Think again. You are definitely at risk regardless of your current financial status.

So, how much liability coverage do you need? Selecting the appropriate amount of Liability Coverage varies from person to person depending on your financial status, assets, and exposures.

If the underlying limits offered on your homeowner’s policy are not adequate, additional coverage may be obtained by purchasing a Personal Liability Umbrella policy. Umbrella policies provide excess liability coverage over and above the underlying limits on your homeowners, auto, watercraft, and motorcycle policies with coverage limits ranging from $1,000,000 up to $100,000,000.

Be sure to discuss your liability exposures with one of Brown & Brown’s experienced Certified Personal Risk Managers, or Personal Insurance Advisors. You earned it, we protect it.