Whose fault is it? Who’s to blame? Is it you?
You’ve probably heard those questions a hundred times or more — from when you or a pal misbehaved as children, to now when you’re a working adult.
And, whatever your age, you know you’ll have to face the music, pay the price.
But sometimes the price can be simply too high to pay, like when someone trips and injures themselves in your home. Or when your dog bites a visitor or passer-by. There are not only medical costs to consider, but also the consequences if the injured person decides to sue you.
In a worst case, say if someone dies, the costs could run into a million dollars or more. And, unless you’re very rich, you probably don’t have that kind of money hanging around.
The result would be an unthinkable amount of financial distress for you and your family, not just now but also in the future — from attachment of earnings, even to bankruptcy.
But protecting yourself is simple. If you have homeowners, condo or renters insurance, you’re protected against such a devastating loss.
More Than Property Protection
Most people think of home insurance policies as protection against loss or damage to the structure of their home (for those who own them) and contents (for both renters and owners). And they are.
But just as important is the protection these policies provide against being held to blame — personal liability as it’s called — for others’ injuries or even loss of life on your property.
In fact, personal liability insurance goes beyond the scenarios we’ve just painted. Suppose a tree in your yard fell on a neighbor’s house or a car belonging to a visitor. In most cases, this would be covered by personal liability insurance.
Or, maybe a drunken guest at your house party starts a scrap on the back lawn and knocks another guest into the pool. Or one of the employees you hired to help cater the event injures themselves on the burning hot cook top.
Most policies will also protect you against legal costs and settlements arising from damage or injury you cause on others property or elsewhere, in fact anywhere on the world
You get the picture. Personal liability is actually a big risk in and out of the home that we often don’t give much thought to.
In a standard homeowners or renters policy, you’ll likely get at least $100,000 per person ($300,000 per incident) of coverage towards lawsuit compensation and legal expenses including defense costs. And everyone knows lawyers can be very expensive.
For that reason, it’s usually possible to negotiate higher limits for the personal liability element of your policy. Although that $100,000 would likely cover most incidents — an injury from a dog bite for instance — you probably don’t want to take the risk that you might need more, which would otherwise have to come out of your pocket.
Getting Under the Umbrella
In fact, for those who understand the risk of even higher settlements and costs, insurers offer an additional policy, known as umbrella insurance, which adds a further layer of protection.
Umbrella coverage can push the limits of your protection up to $1 million or more. So, when the limits of your standard policy are exhausted, the umbrella policy kicks in and meets costs up to that much higher limit.
Umbrella policies, which are actually quite cheap to purchase — usually less than a dollar a day — also provide higher limits on other elements of insurance, as well as certain protections that aren’t covered in standard homeowners or renters policies.
What Personal Liability Insurance Does Not Cover
Although personal liability coverage is quite wide-ranging in scope, there are certain incidents that it doesn’t cover.
For example, it doesn’t protect you for injuries or damage in a car accident you cause. Your auto policy does that (see below).
In the same way, it doesn’t protect against liabilities arising from your business activities. These should be covered under a commercial general liability policy.
Nor does it protect against damage or injury you purposely cause in your home.
There could be other exclusions in your policy, so it’s important to read its wording carefully or to discuss this with your agent.
Personal Liability Insurance for Drivers
In addition to the personal liability protection under your home insurance, your car policy also could provide similar levels of coverage for injuries and damage resulting from an auto accident you or your authorized driver causes to others.
In Massachusetts, this type of coverage is mandatory, but with lower legal requirements — $20,000 per person and $40,000 per incident. In practice, agents and insurers would recommend higher limits based on past settlement and legal costs.
How Do I Get Personal Liability Insurance for My Home?
One of the worst aspects of personal liability is that you can sometimes be held legally responsible for accidents you couldn’t possibly foresee, like the drunk who pushed your guest into the pool or the precious antique your child dropped on the floor and smashed while you were visiting a friend.
So, although homeowners. condo or renters insurance is not a legal requirement in Massachusetts, if you don’t have it, you’re taking a crazy risk that could result in financial disaster for you. Getting protected should be a high priority.
One of the best ways to secure this protection is via an independent agent such as Park Family Insurance. A good agent will work with multiple insurers, so they can negotiate a competitive rate.
They will also be able to negotiate appropriate discounts and advise you on the level of coverage that’s appropriate for your needs and budget.
To learn more, whether you’re buying coverage for the first time or reviewing an existing policy, just call us for a free, no-commitment chat.