How Well Are Homeowners Protected From Injury Liability?

As a homeowner, it's a good idea to understand how well covered you are in the event of an accident in your home that leads to somebody's injury.

Most people buy a homeowners’ insurance policy so that they are covered if their house or property is damaged by fire, wind, or natural disaster. But the terms of most of these policies also cover homeowners in the event that someone is injured on the property.

What Types of Accidents are Covered?

If someone visits your home and is injured in a fall accident, for example, as long as you have homeowners' insurance, chances are that the liability coverage provision within the policy will kick in and cover any injury claim that your house guest files.

It depends on the specifics of your policy of course, but most homeowners’ insurance agreements will protect you from liability when dog bites, slip and fall incidents, swimming pool accidents, and injuries to contractors and other visitors occur on your property.

These types of claims are based on the homeowners’ negligence, so the idea is that you’re protected when your own carelessness leads to an injury on your property. In reality though, the insurance company probably won’t spend too much time trying to prove fault in a legal sense. If it appears that an accident occurred and you are likely liable, the insurance company will probably cover the claim, even if it can’t be “proven”.

How Well Protected Are You?

If you’re sued over an injury that occurs on your property, even if your homeowners’ insurance will kick in to cover the claim, these kinds of claims can get expensive. If someone is seriously injured, it’s easy to see how damages can add up to hundreds of thousands of dollars. So you want to make sure that your policy (or any separate personal injury provision) has a high coverage limit. You don’t want to be left personally on the hook for any amount over the policy limit.

In homeowners' policies, the standard third-party liability limit is $100,000. That means, if someone is injured on your property, your homeowners' insurance will pay any injury claim filed by the injured houseguest -- medical bills, lost income, and other damages -- up to $100,000. So if the claim is valued at anything under $100,000, you never pay a dime (and in most cases the insurer will even appoint a lawyer to defend the claim is necessary, see below).

In the real world, most insurance claims settle for an amount that is at or below the policy limits. But in some cases, if the injured person has suffered serious or permanent injuries, their claim might go above the policy limits, and then you will be personally on the hook for any amount above the coverage ceiling.

So it pays to have more coverage, even if it raises your premiums a little bit. In most insurance policies, the coverage limit varies exponentially based on how much of a premium you are paying -- the higher the premium, the higher the liability coverage ceiling. See “Consider Personal Injury Liability in Your Homeowners’ Insurance Policy” for more on purchasing the right coverage.

Insurance Coverage Usually Includes Legal Defense

Your policy may come with a free lawyer! A secondary benefit of having a homeowners’ policy in place is that the insurance company will typically appoint -- and pay for -- an attorney to deal with any lawsuit that stems from the claim. In other words, you probably won’t need to hire your own lawyer, which is good news for you and your wallet.

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