This is part two of our post answering the question, “How much home insurance is enough?”
Coverage E – Personal Liability
The next coverage on a standard home insurance policy protects you against financial responsibility when you are liable for a third-party’s bodily injuries or property damages. Personal liability insurance can take care of legal expenses and judgments for property damage repairs, medical bills, lost wages, and more. If your limits are high enough, you may be able to avoid dipping into your savings accounts or paying for these expenses out of your own pocket.
Here in Arizona, the costs of many types of claims are trending higher year after year. For example, the average cost of a dog bite-related injury claim is more than $56,000, which is more than 50 percent higher than the national average. Incidentally, Arizona also ranks among the top 10 states for the frequency of dog bite claims, putting residents of our state at higher risk than those in most others. Examples of other personal liability claims include:
- Slip-and-fall accidents at your home
- Hitting a golf ball off-track and injuring another player
- Accidental damages to a hotel when traveling
- And much more
Fortunately, personal liability coverage typically extends to the members of your household, including your pet. It also tends to provide coverage for accidents occurring on your property, as well as when you are away from home – just not for excluded incidents, such as car and boating accidents.
Here at Smart Move Insurance, we work hard to help our clients financially prepare for nearly any scenario. We encourage homeowners to purchase adequate coverage that will protect income and assets against expensive litigation. Many homeowners choose coverage amounts between $100,000 and $300,000, although your needs may vary. Contact our office for help determining if higher limits may be right for you.
Coverage F – Medical Payments
Medical payments coverage is the next section in most home insurance policies. Unlike liability coverage, it is not contingent upon fault; however, it does provide coverage for third-party injuries occurring on your property. Medical payments coverage limits are typically low – around $1,000 to $5,000. However, this is often enough to cover the cost of a doctor’s office visit or a deductible, which may be enough to discourage a lawsuit for further compensation.
Homeowners can customize their coverage using optional endorsements available from the insurer. There are many different types of endorsements, all of which serve different purposes. Some extend coverage for specific events not covered by standard home insurance, whereas others increase the amount of compensation a policy-holder receives for a particular loss.
Examples of common home insurance endorsements include:
- Water backup and sewer endorsement (recommended for most homeowners)
- Scheduled coverage endorsement for expensive belongings
- Home business endorsement
- Inflation guard endorsement
- Replacement cost coverage endorsement for personal belongings
Beyond Home Insurance
While your home insurance policy can protect you against many different losses, it may not be adequate to shield your family against a major lawsuit. When judgments reach hundreds of thousands or even millions of dollars, a $300,000 personal liability limit may fall short of meeting your needs. Instead of facing financial ruin and paying the excess damages yourself, we recommend talking with an agent here at Smart Move Insurance about adding an umbrella policy to your insurance portfolio.
Umbrella insurance is supplemental liability protection that pays for excess damages beyond the limits of your primary coverage. It usually comes with a minimum of $1 million in additional liability protection, although higher limits are available to those with significant assets.
Most homeowners can qualify for umbrella insurance with premiums of just $200 per year or less. Contact our office for more information or to request your free quote.