This is part two of our post answering the question, “How much home insurance is enough?”
Coverage E – Personal Liability
Personal liability protection may be the furthest thing from your mind when shopping for home insurance, but the fact is it is an exceedingly significant part of your policy. This coverage may not pay to rebuild or replace your home and belongings, but it can help protect you against the loss of your assets and income due to a lawsuit. This includes accidental property damages or injuries for which you or a member of your household is responsible.
Personal liability coverage covers third-party losses that occur on your property and also extends to damages that occur when you or a member of your family is away from home. There are only limited exceptions for events like boat and car accidents. For example, if your child causes damage to a sculpture in a hotel lobby, your personal liability coverage generally helps pay for the loss. Likewise, if you are sued for medical bills and lost wages after your dog bites a neighbor, your personal liability coverage can help protect you against the financial responsibility, which averages more than $37,000 per claim.
How Much Coverage is Right for You?
We here at Killey Insurance know how important it is to have the right liability coverage limits. Too little coverage can leave you with a major financial burden after a lawsuit, and it may even force you to liquidate your personal assets and income to pay for the excess damages. That is why we typically recommend a minimum of $100,000 to $300,000 in personal liability protection.
Coverage F – Medical Payments
The medical payments section of your home insurance policy provides payment for medical bills stemming from third-party injuries that occur on your property, even if they are not your fault. The limits for this coverage are typically capped between $1,000 and $5,000. However, having this extra protection could help you avoid a lawsuit – particularly if the payment is enough to cover an office co-pay or a visit to the emergency room.
Endorsements are optional coverage that can be added to your insurance policy. Several different types of home insurance endorsements can help offset your vulnerability to specific risks. For example, the replacement cost coverage endorsement provides enough compensation to replace damaged belongings with new ones due to a covered loss. Without this endorsement, you may only receive compensation for the actual cash value, which takes into account the depreciation of your belongings.
Other examples of common home insurance endorsements include:
- Scheduled coverage for expensive belongings that exceed your coverage limits
- Inflation guard to protect against rising construction and rebuilding costs
- Water backup and sewer protection
- Home business coverage
- And more
Beyond Home Insurance
At Killey Insurance, we work hard to build and personalize a home insurance policy that provides comprehensive protection against loss. In most circumstances, a high-limit policy is adequate to cover our customers’ claims. In the event of a major lawsuit, however, the damages could soar much higher than the available limits in your policy, leaving you with hundreds of thousands of dollars in excess damages to pay out of your own pocket.
Umbrella insurance is supplemental coverage that helps pay for personal liability expenses that exceed the limits of your primary coverage. Most policies come with at least $1 million of coverage, which usually costs as little as $200 per year or less. Contact our team today for more information about this important coverage and to find out how affordable it can be for you.