This is part two of our post answering the question, “How much home insurance is enough?”
The next coverage on a typical home insurance policy is Coverage E – personal liability. This important coverage helps shield your income and assets against lawsuits involving a third-party’s injuries or property loss. This could come from an accident occurring on your property or an accident you or a member of your household causes while traveling away from home. Apart from certain events, such as car accidents, the personal liability coverage in your home insurance generally covers you wherever you go.
Examples of personal liability claims include:
- Dog bite injuries ($37,000)
- Home accidents, such as slips and falls
- Accidental damage to your hotel room
- Bicycle accidents
- And more
How Important is Personal Liability Coverage?
It may not seem directly correlated to safeguarding your home, but having the right personal liability coverage limits could be the single factor in protecting your way of life. Without adequate limits, you still must pay any damages that exceed the coverage in your policy, which could leave you with tens or even hundreds of thousands of dollars in debt. Unless you have that much money in the bank, you may have to sell your assets and make payments from future income to cover the damages.
Here at Tagge Insurance, we help our customers calculate their risk vulnerability and determine how much coverage could be right to fit their needs. Many opt for high limits of personal liability coverage – usually between $100,000 and $300,000. If you think you may be underinsured for personal liability, contact our office to speak with an agent today.
If a guest is injured in your home, medical payments coverage provides quick payment for medical bills even if you are not at-fault for the accident. Though the coverage is generally low – usually $1,000 to $5,000 – it is often enough to cover doctor’s office bills or even a health insurance deductible.
Endorsements help you make your standard home insurance policy your own. These optional benefits extend the coverages within your policy to provide greater benefits and also safeguard against additional losses that may otherwise be excluded from standard coverage.
Here at Tagge Insurance, we recommend endorsements to most homeowners, although they vary depending on the needs of the policy-holder. For example, nearly all homeowners can benefit from the additional protection provided by a water backup and sewer endorsement. Likewise, most could benefit from replacement cost coverage for their personal belongings, and inflation guard endorsement to protect against the rising future cost of rebuilding a home, and earthquake coverage. However, there are other endorsements that are specific to only certain individuals. Examples include those with high-value personal belongings such as jewelry may need to schedule those items, or a home business would benefit from a home business endorsement.
For help determining which endorsements to add to your home insurance policy, contact one of our helpful team members today.
Beyond Home Insurance
Having the right home insurance is a good start to protecting your home and assets, but there may still be risk exposures not covered by the high limits of your policy. For example, a $300,000 maximum personal liability limit would not be enough to cover a million-dollar lawsuit. In this case, you would need a supplemental policy called umbrella insurance to help fill in the gaps left behind by your primary coverage.
Umbrella insurance pays excess liability damages beyond that which is covered by your home insurance policy and other types of coverage, such as auto insurance. It typically extends your coverage by at least $1 million, although some homeowners opt to purchase higher limits of $2 million or more.
To find out more about umbrella insurance and how you may qualify for coverage for just $150 per year or less, contact our office today.