Homeowners Insurance how much Liability Coverage is enough

Liability coverage has nothing to do with the structure or contents of your home, rather it is the coverage that protects you from having your home and property attached in lawsuit if someone is injured on your property and holds you responsible, or if you are held liable for the damage or destruction to someone else’s property.

$100,000 is the standard liability limit that is included on most homeowner’s insurance policies, but for most people, this is inadequate coverage. $100,000 disappears quickly if you are sued or if someone is badly hurt on your property. Keep in mind also that you don’t have to actually be liable for someone to claim that you are liable and file a lawsuit against you. Adequate liability coverage will pay for your legal costs regardless of the outcome of such a suit. In the event that you lose, it will also reimburse the injured party.

Increasing your liability limits on your homeowner’s policy is a very inexpensive way to protect yourself against this kind of scenario. If your home is very valuable and you own a lot of valuable property, you would be well advised to also look into a separate policy that extends your liability coverage beyond your standard homeowner’s limit by one to three million dollars. This type of policy is called an “umbrella” policy because it extends both your auto and home liability limits by whatever amount you purchase, giving you an “umbrella” of general liability protection over all your policies regardless of the situation. So, for instance, if someone is badly injured in a pool accident at your home, or in a car accident in which you are at fault, once the liability limits on your home or auto policies are used up, your umbrella limits will take over, insuring you do will not have to tap into your own funds or lose your own assets. Umbrella policies are generally inexpensive and well worth the nominal cost should you ever need to use your coverage.

Certain circumstances demand maximum liability coverage. The aforementioned example of owning a pool is one of them, as are the following: owning an outdoor trampoline, owning acreage (wooded or otherwise), being a public or prominent figure, having large financial or personal assets, owning a large dog or dogs, having teenagers and/or young males in your household who drive, and living in a neighborhood where there are lots of small children. An additional benefit for public persons is that most umbrella policies extend liability coverage to include being accused of libel or slander, something the average person rarely has to worry about, but people in the public eye are forced to consider. Last but by no means least, should you find yourself in a situation that requires legal representation due to liability claims against you, your insurance company will just take over, representing you in court in a field in which they are clearly expert, and unburdening you from the stress of finding a decent attorney and making complex decisions under unwelcome pressure.

Anyone who has ever visited an attorney knows how expensive it can be and how counterintuitive legal outcomes can be. In this litigious culture, good liability coverage will not only give you peace of mind, it will also leave money in your pocketbook. Liability coverage is one of the best insurance deals around, yet is too often neglected by the average person. We all hope we will never cause others harm or be accused of things that are not our fault, but why leave this to hope when for a few dollars a month and minimal effort we can relax, leaving that possibility to insurance professionals?