This is part two of our post answering the question, “How much home insurance is enough?”
Coverage E – Personal Liability
This section of your insurance policy is very different than the previous ones. Coverage E pertains to payments for third-party damages – not the loss of your own home or belongings. If you are at-fault for another person’s loss, personal liability coverage can indirectly protect your assets and income against the financial responsibility of a lawsuit. It comes standard on a typical home insurance policy, but you will need to select limits that fit your needs.
Here at Mid-Rivers Insurance, we understand the value of having adequate personal liability limits. Without it, you may need to sell your possessions, liquidate investments, drain savings accounts, or even make payments from future wages until you pay off your debt. Since claims can cost tens or even hundreds of thousands of dollars, it could pay to have high limits of at least $100,000 to $300,000.
Types of Personal Liability Claims
As an independent insurance agency in Missouri, we feel like we have seen everything when it comes to liability claims. Some claims are unusual and unique, whereas others are much more common. Dog bite claims, for example, frequently occur, topping the list of common home insurance liability claims in the U.S. If your pet attacks a person or another pet, the claim could cost you tens of thousands of dollars. In fact, the average cost of dog bite claims in the U.S. are at an all-time high of more than $37,000 – nearly double what it was in 2003.
The question isn’t whether your dog will bite someone. It is, “How much will you be sued for if it does?” Will your liability limits be high enough to foot the bill, or will you need to pay for the damages yourself? Fortunately, it does not matter if an accident occurs at your home or while you are away. It also does not matter if it was you, your pet, or another member of your household who caused the accidental injury or property damage. With certain exceptions for events like car and boat accidents, personal liability coverage generally follows you and your family members where ever you may go.
Coverage F – Medical Payments
Medical payments coverage is similar to liability coverage, but it does not require the establishment of fault to pay benefits. If someone who does not live in your home is injured on your property, medical payments coverage helps ensure they get the medical attention they need, whether it requires a trip to the emergency room or a visit to the doctor’s office. With typical limits between $1,000 and $5,000, this coverage may even cover the cost of a health insurance deductible.
A standard home insurance policy provides broad benefits that are suitable for the needs of the average homeowner, but it leaves out many important protections that are necessary or important to a narrower group of homeowners. Endorsements allow insurers to customize home insurance policies to fit the needs of these individuals while still keeping costs low for those who do not need or want these extra benefits.
Examples of common endorsements include scheduled coverage for high-value belongings, such as jewelry and furs. It could also include coverage for a home business or replacement value coverage for personal belongings. Some endorsements are even recommended for the majority of homeowners, such as water backup and sewer protection. For help determining which endorsements to add to your home insurance policy, contact our office today.
Beyond Home Insurance
The high limits on your personal liability coverage may still be too little to cover your financial burden after a major lawsuit. Instead of leaving your assets and income at risk, we recommend talking with an agent about adding an umbrella insurance policy to your portfolio. Umbrella insurance is supplemental liability protection that pays additional benefits once you exceed the limits on your primary coverage. Policies typically come with a minimum of $1 million in additional coverage, all for an average of just $200 per year or less.
For more information about umbrella insurance or to request your free quote, contact our office today.