This is part two of our post answering the question, “How much home insurance is enough?”
Coverage E – Personal Liability
How much will you be sued for? It is a question that few people think about – especially when shopping for home insurance. However, personal liability protection is a major component of a typical home insurance policy, so it helps to know how much you stand to lose when deciding how much coverage you might need.
Home insurance typically covers third-party injuries and property damages caused by accidents or negligence, with the exception of certain types of events, such as car and boat accidents. It covers you and also extends to members of your household, including your pet. For example, if your pet escapes your yard and bites a child riding her bike, the damages could be tens of thousands of dollars. In the U.S., dog bite injuries happen to be some of the most frequently filed claims, with average costs per claim reaching more than $37,000.
Here at Vanyo Insurance, we recommend purchasing enough coverage to protect your savings and assets now, as well as any income you may earn in the future. All of it could be at risk in a lawsuit, which is why many homeowners choose a minimum of $100,000 to $300,000 of personal liability coverage. For help determining how much personal liability protection you may need, contact our office today.
Coverage F – Medical Payments
Coverage F is a small, but helpful part of your home insurance policy, as it provides payment for injuries that occur in your home or on your property. There is no need to establish fault for the accident, as the benefits are usually capped between $1,000 and $5,000. This may be adequate to cover a doctor’s visit, health insurance deductible, or even an emergency room visit. Of course, as a homeowner, you can still be sued for damages, but medical payments coverage is sometimes enough to deter litigation for minor injuries.
Endorsements allow you to make your home insurance policy your own. They are completely optional, but many homeowners select one or more endorsements to increase compensation for claims and expand coverage to include more losses. Some endorsements, such as home business endorsements and scheduled coverage endorsements, are only recommended for policy-holders with specific risk vulnerabilities. Others are encouraged for a much broader demographic. Examples include:
- Water backup and sewer coverage
- Inflation guard for your dwelling
- Replacement value coverage for personal belongings
If you think you may need to add one or more endorsements to your coverage; contact a team member here at Vanyo Insurance Group today.
Beyond Home Insurance
Once you are confident in your home insurance coverage, it may be time to talk with an agent about increasing your liability protection outside the limits of your policy. Even the highest home insurance liability limits may not be enough to shield you against a major lawsuit. If your policy only pays for $300,000 of a $600,000 judgment, how will you afford the remaining $300,000? Will it come out of your savings accounts? Will it affect your future income?
With an umbrella insurance policy, the excess damages are likely covered up to the limits of your supplemental coverage, which is usually $1 million or more. Umbrella insurance pays for liability damages that exceed the limits of your primary coverage, as well as for some types of liability that may be excluded from a typical home insurance policy altogether. In most cases, coverage costs just $200 per year or less for a $1 million policy, although higher coverage limits are available.
For more information about umbrella insurance or to request your free quote, contact our office today.