This is part two of our post answering the question, “How much home insurance is enough?”
Coverage E on your home insurance policy is coverage for personal liability when you or a member of your household is at-fault for another person’s injuries or property loss. Instead of paying for the damages from your personal savings accounts or your future monthly income, home insurance can pay for legal bills and judgments up to the limits of your policy.
Are You at Risk?
What are your risks as a homeowner? To start, you may be responsible for any accidents that occur on your property, whether it is a fall down your stairs or an injury in your swimming pool. However, your risks also extend beyond your property line. You could be sued for any third-party injury or property loss, whether your child hits a pedestrian with her bicycle or your dog bites someone. The damages can add up quickly, as well. According to the Insurance Information Institute, the average cost of a dog-bite claim is now over $37,000 – a number that is nearly double what it was in 2003.
All standard home insurance policies include coverage for personal liability, and as the policy-holder, you choose the amount of coverage. When selecting limits, it is important to understand your risk of being sued, as well as what you have to lose if a court determines you are at-fault. If you do not have enough personal liability insurance to cover the damages, you may have to pay for them yourself. That could mean tapping into your nest egg, liquidating some investments, mortgaging the equity in your home, or even garnishing your wages for years to come.
Although limits may vary, many homeowners choose a minimum of $100,000 to $300,000 to protect their income and assets. We recommend working with an independent agent here at Thiel Insurance to assess your individual risk and determine how much personal liability coverage is right for you.
Coverage F on your insurance policy provides payment for medical expenses when someone is injured on your property – even if you are not at-fault. This coverage typically pays between $1,000 and $5,000, which can be used to cover doctor’s bills, emergency room visits. With people choosing higher health insurance deductibles, this coverage can come in quite handy.
When the coverage in your standard home insurance policy just isn’t enough, endorsements can help close the gaps. These policy additions expand coverage to include extra benefits for certain types of losses and events. They offer optional protection for homeowners with risk vulnerabilities not covered under a standard policy.
Here at Thiel Insurance, our team recommends endorsements to individuals who:
- Own a home business
- Own expensive belongings such as jewelry or other collectibles
- Own a boat, atv, snowmobile, or golf cart
- Prefer compensation for belongings based on the cost to replace them, rather than the actual cash value
- Are at-risk of water damage due to sewer backup
These are just a few of the reasons you may need an endorsement. Once again, talk to one of our agents and we can help determine what endorsement are right for you and your family.
Beyond Home Insurance
In addition to home insurance personal liability, some homeowners may also need an umbrella policy to protect against major lawsuits and litigation. If you or a member of your household are sued for a serious injury or loss of life, the financial damages could reach hundreds of thousands or even millions of dollars. If your home insurance is not enough to cover the liability, umbrella insurance can supplement the coverage.
To find out more about umbrella insurance and how you may be able to better protect your income and assets for as low as $135 per year, contact an agent here at Thiel Insurance today.