This is part two of our post answering the question, “How much home insurance is enough?”
The next coverage on your home insurance policy is personal liability protection. Although this does not directly protect your home and belongings, it can shield your assets against loss due to financial responsibility in a lawsuit.
A standard home insurance policy generally includes personal liability coverage for third-party bodily injury and property damages. That means you are generally covered for damages a member of your household accidentally causes to someone who does not live in your home. This could include damages and injuries occurring at your home or those that you, your child, or your pet cause while away from home (with certain exceptions for events like car and boat accidents). Examples might include:
- A bicycle accident involving your child and a pedestrian
- A neighbor who trips over your water hose
- A lawn care provider who falls in a hole in your yard
- An emergency room visit when your dog bites a child at the park
You may not be able to prevent every accident, but you can financially prepare for the unexpected. We here at Gutman Insurance generally recommend that our customers purchase high-limit personal liability protection – usually a minimum of $100,000 to $300,000. Without adequate coverage, your personal income and assets could be at risk in a lawsuit.
When someone gets hurt at your home, medical payments coverage ensures they get the care they need, regardless of fault. Limits for this coverage are typically low – usually between $1,000 and $5,000. However, this may be just enough to cover x-rays, doctor’s visits, an emergency room visit, or even a health insurance deductible. While it will not eliminate your potential liability for a guest’s injury, it could be enough in some cases to help avoid a lawsuit.
The endorsements on your home insurance policy are optional, but they facilitate the personalization of your coverage to fit your individual needs. These coverage enhancements provide additional coverage for certain risk exposures that only certain homeowners are vulnerable to. They also provide extra benefits for homeowners who prefer additional compensation for a claim.
For example, you may opt to include a replacement cost coverage endorsement for your personal belongings if you prefer reimbursement for possessions based on the cost to replace them rather than their depreciated, actual cash value. Another endorsement – the inflation guard endorsement – helps ensure you continue to have enough coverage to rebuild your home in the future as building costs rise over time. Other examples of common home insurance endorsements include:
- Water and sewer backup protection
- Home business coverage
- Scheduled coverage for high-value belongings
- And more
Beyond Home Insurance
Lastly, many homeowners choose to reinforce the personal liability coverage in their home insurance policies by purchasing umbrella coverage. This is supplemental liability protection that pays for liability damages exceeding the limits of your primary coverage. Most umbrella insurance policies provide at least $1 million in supplemental liability protection, with additional coverage available in million-dollar increments. At an average of just $200 per year or less, it is an affordable way to protect your future better.
Umbrella insurance has safeguarded many families against financial ruin in the face of million-dollar lawsuits. Talk to an agent here at Gutman Insurance to find out how it can better protect your family’s income and assets, too.