Liability Insurance and Typical Homeowners PoliciesPosted March 3, 2016
Liability insurance protects policyholders from having to pay out of pocket for costs associated with legal claims. For example, if a person is found liable for causing property damage or injury to another, his or her primary liability insurance pays for medical costs or repairs up to the limits of the policy. When an accident occurs on a homeowner’s property, homeowners liability insurance covers the bulk of the costs. However, if the other party is awarded more than a person’s homeowners policy covers, an umbrella insurance policy makes up the difference.
When an accident occurs on another’s property, the injured guest may be entitled to compensation for his or her injuries. Liability coverage is a standard part of a homeowners insurance policy and helps cover property owners’ costs when guests are injured on their property. The policy covers a variety of costs related to the accident, including:
- Medical bills;
- Pain and suffering;
- Lost wages;
- Death benefits; and
- Legal costs.
However, homeowners liability insurance does not cover everything. For instance, purposefully inflicted injury that occurs on a homeowner’s property is not covered by liability insurance.
While homeowners insurance and liability insurance cover most costs associated with a policyholder’s legal liability, they are not always enough. In these situations, it is important to have an umbrella insurance policy, which acts as extra liability insurance and is designed to supplement existing policies and protect policyholders from major claims and lawsuits.
Umbrella insurance policies protect policyholders by:
- Providing additional liability coverage above the policy limits of any homeowners, liability, or automobile insurance policies; and
- Providing coverage for claims that are specifically excluded by liability policies.
Umbrella insurance mainly provides coverage for the following:
- Damage to property;
- Bodily injuries; and
- Landlord liability.
Umbrella insurance policies also provide coverage for policyholders who have been sued for:
- False arrest, detention, or imprisonment;
- Emotional distress;
- Malicious prosecution; and
- Other personal liability suits.
Umbrella insurance policies only provide coverage when basic liability policy limits have been reached or the claim is excluded from coverage. If the award or settlement exceeds a policyholder’s umbrella insurance coverage limits, he or she has to pay the remaining amount out of pocket.
Contact Our Legal Team Today
If you are interested in protecting your assets from being seized during potential litigation, please contact one of our experienced liability insurance attorneys at the Bennett Law Firm, at 405-272-0303, for a free consultation.