This is part two of our post answering the question, “How much home insurance is enough?”
When accidents happen, at-fault parties are financially responsible for the damages. Personal liability coverage is the section of your home insurance policy that helps pay for the third-party injuries and property damage you or the members of your household are responsible for causing.
All standard home insurance policies provide some degree of personal liability protection, although we here at Heinen Insurance recommend purchasing high limits of coverage – usually at least $100,000 to $300,000. This is typically enough to protect against the majority of liability claims, which can range from simple slip-and-fall injuries to accidents involving major loss. Without adequate coverage, you could be personally responsible for paying any damages that exceed the limits in your home insurance policy – even if you do not have sufficient savings or assets to pay for it. That could mean garnishment of your wages and derailment of your financial plans for the future.
Types of Losses
Personal liability insurance helps pay for injuries and property damages spanning a broad range of events. It could be that your child’s best friend is injured in your swimming pool, or your dog could bite someone while visiting the park. In fact, personal liability insurance typically follows you and the members of your household nearly anywhere you go, with certain exceptions for events like car and boat accidents.
Injuries can happen anywhere – including your home. If someone other than a resident is injured on your property, medical payments coverage can help pay for medical attention, regardless of whose fault the accident is. Most medical payments coverage is limited to $1,000 to $5,000 of coverage. While this coverage does not relieve you of liability, it may be enough to pay for a health insurance deductible or take care of a doctor’s visit.
Endorsements build upon the existing coverage in a home insurance policy, providing additional protections and increased benefits for certain risk exposures. For example, standard homeowners insurance generally covers personal belongings for their actual cash value, which is the depreciated value of the damaged asset. Homeowners who prefer enough compensation to fully replace damaged belongings with new ones will need to purchase a replacement cost coverage endorsement. Other common home insurance endorsements include:
- Inflation guard endorsement to protect the future cost of rebuilding your home
- Water and sewer backup protection
- Home business coverage
- Scheduled coverage for expensive belongings, such as jewelry and fine art
- And more
For help determining which endorsements could be right for you, contact our office today.
Beyond Home Insurance
Personal liability insurance sometimes falls short of covering all the damages in a lawsuit. Even high-limit coverage is insufficient to protect a homeowner against a million-dollar lawsuit. That is why we recommend our clients consider an umbrella policy, which provides additional liability protection beyond the limits of a home insurance policy. If you are sued, your homeowners liability serves as the primary coverage. Once you exhaust the limits of that insurance, umbrella coverage pays for remaining damages up to the limits in your supplemental policy.
Most umbrella insurance policies provide a minimum of $1 million in liability protection, although higher limits are available. An average of just $200 per year or less provides peace of mind knowing your family, income, and assets are safeguarded against financial ruin. For more information or to request your Wisconsin umbrella insurance quote, contact our office today.