Some insurance advisors consider liability protection one of the most important aspects of a homeowners policy. The reason being: the liability portion of your policy will pay for the cost to defend you, AND any court appointed awards… BUT only up to the policies liability coverage limit. If you didn’t purchase enough liability coverage, you would be stuck with the remainder of the costs, and that could lead to financial ruin. Can you now see why liability coverage is so important?
Let’s take a step back. Liability coverage protects against injuries, accidents, and damage that happens on your property OR ANYWHERE else.
Examples of possible claims:
An elderly woman is walking in your neighbored and is mowed down by your excitable family dog that accidentally gets off the leash. Woman is awarded a claim of $275,00.
You throw your 10-year old daughter a birthday bash and invite her best friends and family. One of the kids accidentally falls from the bouncy jump and breaks her arm. The parents want to sue to recover damages for neglect resulting in the accident.
It’s Halloween, and you decided to throw the Halloween Haunted House of the year. Little did you know an asthmatic girl would die from “artificial fog and sickly scents”. The girls parents are now facing at least 1 million in medical bills.
Your neighbor asks you to watch her daughter because she’s forced to work overtime. Not a problem. The child gets hurt while she’s in your care.
You’re at your favorite golf course, you tee off, and your ball accidentally hits an innocent bystander in the face and brakes several of his facial bones. The man you hit happens to be a surgeon and is forced to be out of work for several months recovering.
Don’t make the mistake of not buying enough liability coverage. Most folks take the off-the-shelf $100,000 of coverage and NEVER consider adding more coverage. Most financial and insurance advisors advocate a minimum of at least $300,000. You have no control if/when a lawsuit may strike. Also, if your net worth is more than $300,000 you MUST consider protecting your assets by adding an umbrella policy to your home and auto policies. The umbrella policy will kick in when the liability on the auto and home policies have been exhausted.