It’s undeniable that we live in a “litigation happy” world, which makes it quite necessary to have insurance on everything from your car to your home. While most forms of insurance will cover a specific type of damage, homeowner’s insurance is designed to cover a number of situations, some of which don’t even have to occur at your home.
What Does Homeowner’s Insurance Cover?
Standard homeowner’s insurance policies often include a section related to personal liability insurance coverage. This section specifies the amount of insurance available to you in case another individual is harmed on your property. This often includes accidents that occur off the property. Most policies will also cover incidents related to pets, for example if your dog gets lose and bites an individual.
Many policies offer a $100,000 coverage minimum which is provided under the personal liability insurance coverage section. This amount compensates individuals that are harmed by occupants of your home or on your property. It will also cover the hiring of an attorney to represent you and usually will also cover the attorney fees of the plaintiff if you happen to be found legally responsible.
What Isn’t Covered?
There are several instances in which a homeowner’s insurance policy will not pay off after injury. Common exclusions are abuse, transmitting a communicable disease, and anything involving the distribution, sale, or manufacturing of illegal drugs. These policies also do not cover intentional acts, business related accidents, or other accidents that are covered under your auto insurance or workers’ compensation.
An insurance policy also doesn’t cover anything involving personal liability over the amount specified in that section of the policy. This means that if your policy provides $100,000 worth of coverage and an accident victim wins $120,000, you will be responsible for the additional compensation. These types of incidents are usually foreseeable, so hopefully you can be fully prepared for their occurrence.
When to get Additional Coverage
As mentioned earlier, you will definitely be responsible for covering any damages that exceed the specified coverage amount involving personal liability. This means that you should purchase a higher insurance coverage amount if you know you may face severe personal liability issues. One common example is if you own a swimming pool. If by some unfortunate means a neighborhood child drowns in the pool, a minimum coverage amount will usually not even come close to covering the damages a court may reward.
You may also take out an ‘umbrella liability policy’ to further protect yourself. Lawsuits related to slander, libel, false arrest, defamation of character, and invasion of privacy are not covered under typical personal liability policies. Adding an umbrella policy to the existing homeowner’s policy will protect you and the occupants of your home in the case of a lawsuit involving any of these and other alleged torts.
For more information about Michigan home insurance, call Insurance Planning Service at 800-220-5582.