This is part two of our post answering the question, “How much home insurance is enough?”
Coverage E – Personal Liability
The next section of your insurance policy may not have anything to do with your home or belongings, but it can still protect you against major financial loss due to third-party injuries and property damages. Typically, personal liability coverage provides payment if you are at-fault for an accident that results in injury or property loss to another person. Despite some exclusions for certain events like car and boat accidents, personal liability generally covers you and the members of your household wherever you go.
It is important to choose adequate coverage for your personal liability, as you may be responsible for paying out-of-pocket for any damages that exceed the limits you choose. For example, if your teenage child injures a pedestrian while riding a bicycle, you can be held liable for the victim’s medical bills, lost wages, and any long-term complications that may result due to the accident. If you only have $100,000 of personal liability coverage, you may have difficulty covering a judgment that totals $250,000 without dipping into your savings or making payments from future income.
Many homeowners choose high coverage limits – often enough to cover a $300,000 liability. However, we recommend working closely with an agent here at G&L Insurance to assess your individual liability risks and determine how much coverage is right for you.
Coverage F – Medical Payments
Medical payments coverage is the section of your home insurance policy that helps pay for basic medical expenses after someone is injured on your property, regardless of fault. The limits are typically low and outlined within your policy – usually between $1,000 and $5,000. This is usually enough to cover the cost of stitches or a health insurance co-payment. Having medical payments coverage can prove highly beneficial, as it may help to resolve small injury claims without legal action. Although it does not absolve you of any liability you have for a guest’s injury, this gesture of goodwill could prevent a lawsuit in the future.
HO-3 and HO-5 insurance policies come with standard coverage designed to address the risk exposures of most homeowners. However, some policy-holders prefer expanded coverage, including additional protections to minimize vulnerability to specific types of risks. Endorsements make it possible to customize home insurance according to the needs of the policy-holder.
For example, water backup can wreak havoc on a home, costing tens of thousands of dollars in damages. While it is not typically covered under a standard home insurance policy, homeowners can purchase a water backup and sewer endorsement that will expand coverage to include this type of damage.
Other endorsements include:
- Replacement cost coverage endorsement for personal belongings
- Scheduled coverage for high-value belongings and collections
- Inflation guard protection for your dwelling
- Home business endorsement
- And more
Beyond Home Insurance
Sometimes home insurance is not enough. Even the most comprehensive personal liability coverage may not be adequate to protect you against a major lawsuit, which could far surpass the limits of your policy. That is why we here at G&L Insurance recommend homeowners consider adding an umbrella policy to their insurance portfolios. Umbrella insurance is supplemental liability that provides extended coverage when damages exceed the limits of your primary coverage. It can extend your liability protection by an additional $1 million or more and may cost as little as $200 per year or less.
For more information about umbrella insurance or to request your free quote, contact our office today.