How Does Liability Work on a Home Insurance Policy?

Among the coverages offered under a typical home insurance policy, you will also receive coverage for certain accidents that may happen on your property.

Personal general liability is a type of insurance that covers claims of bodily injury and property damage. For example, if someone falls down the stairs in your home, you could be held responsible for their medical bills, even if the accident was completely out of your control. Bodily injury coverage can help with your guest’s medical bills after an accident as well as protect you from a lawsuit concerning the accident.

Who Does Home Liability Insurance Cover?
Everyone who permanently lives in your home should be covered under your home’s liability insurance. This means that if one of your children accidentally causes property damage, such as hitting a baseball into a neighbor’s window, this insurance can help pay for the repairs and cover you in case of a lawsuit. One of the exclusions is if someone in your household commits a crime or causes injury or damage on purpose. If your child breaks into someone’s home and steals money, for example, this will not be covered under home insurance.

Liability insurance can also cover your pets. Home insurance can cover bodily injury and property damage your pets may cause someone else, such as if your dog bites someone or damages their property. There are certain limitations when it comes to liability and pets, however. Some insurance companies exclude certain pets and breeds from home insurance coverage. Exotic pets are often excluded as well as certain dog breeds, such as huskies, German shepherds and pit bulls.

How Does Compensation Work for Liability Insurance? 
Unlike the other types of compensation under home insurance, payment for liability claims do not always go directly to you. In the case of medical bills and property repairs, compensation should go to the victim. Medical payments may be paid as the bills arise, such as if a victim needs continuous care after an accident at your home. Other compensation can help you pay for expenses related to a lawsuit. This includes court fees, defense costs, settlement expenses and more.

Be sure to check your home insurance policy to make sure it fits the amount of liability risk you face. Most home insurance policies begin with $1 million in liability coverage, but some homeowners may need higher limits.