Your homeowners insurance policy includes liability coverage that will pay for medical bills, lost wages, and other expenses if someone gets injured at your house. Your policy will also cover accidental damage to someone else’s property and legal expenses related to a covered claim.
That doesn’t mean that you can rely on your homeowners insurance to help you out financially in all cases involving an injury or property damage. Under some circumstances, you will be on the hook for those costs.
Intentional Acts
If you or another member of your family intentionally harms someone on your property, that individual can sue you, and you can be held responsible for medical bills and other costs. If a person who lives in the home intentionally damages another individual’s property, that will also be excluded.
Your Family’s Losses
Your homeowners insurance policy’s liability coverage will apply to injuries and property damage if the person who experiences the loss is not a member of your family. It won’t cover injuries that you or another family member sustain at your house. In that case, you will have to file a claim through your health insurance policy.
Dog Bites
If your dog bites a guest, or if it bites someone while you’re taking it for a walk, your homeowners insurance may or may not cover associated costs. Some insurers exclude coverage for dogs of certain breeds, while other companies exclude coverage for dog bites altogether.
Home-Based Business
Losses related to a home-based business are generally excluded from homeowners insurance coverage. If you run a business out of your house and someone suffers an injury or property damage that’s related to your business, your homeowners insurance company can refuse to pay. That’s why you should have a separate insurance policy for your home-based business.
Losses That Exceed Your Amount of Coverage
Your liability coverage has a dollar limit. Standard coverage limits are high enough to cover most liability claims, but sometimes a person is severely injured, can never work again, and requires long-term medical care. Those costs might add up to more than the homeowners insurance policy’s coverage limit.
If you find yourself in that situation, the injured person can sue you for expenses that your insurance doesn’t cover. You might lose your home, savings, retirement investments, and other assets.
Umbrella insurance can protect you from that type of scenario. It can provide coverage above the limits on your homeowners insurance policy and shield your assets.
Review Your Insurance Coverage
If you have questions about what your homeowners insurance policy covers, or if you think there might be a gap in your coverage, get in touch with your insurance company or agent as soon as possible. You might have to raise your coverage limit, add an endorsement, or purchase an umbrella policy or a home-based business policy to be fully covered.
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