What Does Homeowner Liability Insurance Cover?

We understand that most homeowners facing their first liability claim have many questions about what to do and what to expect from their homeowner liability insurance. We understand that dealing with insurance companies can be confusing, so, we have created this FAQ to answer some of the most common questions we receive from homeowners when someone makes a liability claim against them.

The Basics

Your homeowner liability insurance policy is a vital financial protection tool. If you have personal liability insurance coverage, your policy Declarations Page will list your coverage limits for your dwelling, other structures, personal belongings, and additional living expenses. However, these limits do not apply to liability claims. When someone makes a claim against you for bodily injury or property damage, you need to look under “Coverage L” and “Coverage M.” These protect you from claims against you. It can protect the person named in the policy, as well as any family members that live in the insured home.

Coverage L: Liability Limit

Coverage L is the liability limit, representing the maximum amount your insurance company will pay for a single occurrence. This part of the policy is crucial for protecting your financial assets when you are held responsible for causing injury or property damage to others. Here’s what Coverage L typically includes:

Legal Fees and Court Costs: If you are sued due to an incident covered by your policy, Coverage L will pay for the legal defense costs, including attorney fees and court expenses. This ensures that you have professional legal representation without incurring out-of-pocket expenses.
Damages: If you are found liable for causing bodily injury or property damage, Coverage L will cover the compensation awarded to the injured party. This can include medical expenses, repair or replacement costs for damaged property, and other related damages.
Settlements: In some cases, claims are settled out of court. Coverage L will pay for these settlements, up to the policy limit, helping you avoid the uncertainties and additional costs of a trial.
Defense Costs: Even if a claim against you is groundless, fraudulent, or frivolous, your insurance company is obligated to defend you. Coverage L ensures that all reasonable defense costs are covered, providing peace of mind and financial protection.
Liability Scenarios: Common scenarios covered under Coverage L include slip-and-fall accidents on your property, dog bites, accidental damage to a neighbor’s property, and injuries caused by household members.

Coverage M: Medical Payments

Coverage M provides an additional layer of protection by covering out-of-pocket medical expenses if someone (other than you or a household member) is injured on your property, regardless of who is at fault. Here’s what you need to know about Coverage M:

Medical Expenses: Coverage M will pay for necessary and reasonable medical expenses incurred by the injured party. This includes doctor visits, hospital stays, surgical procedures, X-rays, and other essential medical treatments.
No-Fault Coverage: One of the key features of Coverage M is that it applies regardless of fault. This means that even if the injury was not due to your negligence, the injured party’s medical bills can still be covered. This helps to promptly address minor injuries and can prevent potential lawsuits.
Injury Scenarios: Common scenarios where Coverage M might apply include a guest slipping on an icy walkway, a neighbor tripping over a garden hose, or a visitor being bitten by your dog.
Prompt Payments: Coverage M facilitates quick payments for medical expenses, which can help maintain good relationships with neighbors and guests by addressing their injuries swiftly and efficiently.
Limits and Exclusions: While Coverage M provides valuable protection, it has limits specified in your policy. It typically does not cover injuries to household members, intentional acts, or injuries sustained during business activities conducted on the property.
Peace of Mind: Having Coverage M can provide peace of mind, knowing that minor injuries will be handled without the need for lengthy investigations or legal proceedings. It is designed to cover medical costs that can arise from everyday accidents, reducing the financial burden on you and the injured party.

Common Questions

Here are some frequently asked questions about homeowner liability insurance:

Am I Legally Required to Do Anything?
Yes, your insurance policy is a contract that requires you to perform certain duties in the event of a claim. For instance, you must report the incident to your insurance company immediately and cooperate by providing any necessary statements or documentation. These requirements are typically detailed in sections titled “CONDITIONS – DUTIES AFTER LOSS” or similar language.

Should I Talk to the Injured Party?
Generally, it is best not to discuss the claim with the injured party, especially if an attorney represents them. Refer all inquiries to your insurance company or the adjuster assigned to your case. This helps avoid misunderstandings and ensures the proper handling of the claim.

Can They Sue Me?
Yes, the injured party can file a lawsuit against you. The only legal barrier is the statute of limitations, which sets a time limit for bringing legal action. Whether the lawsuit has merit will be determined during the legal process. Your liability coverage will typically cover the costs of a defense attorney for covered claims.

How Can I Tell if It’s a Scam?
If you suspect a fraudulent claim, report your concerns to your insurance company and the adjuster handling your case. They have the expertise to investigate and address potential fraud.

What Should I Do if It Was My Fault?
If you believe your actions caused harm, inform your insurance company. Your policy is designed to cover claims arising from your negligence, provided the harm was not intentional.

What If It Wasn’t My Fault?
Always be honest with your insurance company. Provide a clear account of the incident, as they need all the facts to protect your interests effectively.

Will My Rates Increase?
Generally, individual liability claims do not lead to rate increases. However, rates may rise if there are widespread claims in your area due to unusual events, like severe weather. Multiple liability claims may result in non-renewal of your policy.

Who Can Answer My Questions?
The adjuster assigned to your case is your best point of contact for any questions. If our firm is handling your claim, feel free to call us anytime for assistance.

Are All Homeowner Liability Insurance Claims the Same?
Almost never! Each claim is unique, which is why it’s essential to gather all the facts from everyone involved.

Additional Coverage Options

Consider additional coverage options for enhanced financial protection:

Umbrella Policy: Provides extra liability coverage beyond your standard policy limits.
Commercial General Liability Insurance: Essential for small business owners to protect against business-related liability claims.
Professional Liability Insurance: Covers claims related to professional services.
Renters Insurance Policy: Offers liability protection for renters.
Auto Policy: Includes liability coverage for car accidents.
Health Insurance: Helps cover medical expenses for injuries.

We Are Here to Help

Our job is to gather the facts so your insurance company can protect you. We respect our client insurers and their customers, and we will ensure you are informed throughout the claims process. If you have questions about your liability claim, call us anytime.

Contact Us

For more information or assistance with your claim, contact us or your insurance representative. We are here to provide the support and answers you need.