This is part two of our post answering the question, “How much home insurance is enough?”
Personal Liability (Coverage E)
The next part of your home insurance policy safeguards your home, assets, and income against a different type of risk – liability. Coverage E provides personal liability protection when you or a member of your household is responsible for a third-party’s injuries or loss of property. Instead of draining your savings account or making payments from your future income, you may be able to rely on this section of your home insurance to cover your financial responsibility if you ever face a lawsuit.
Types of Losses
Accidents happen in the blink of an eye. Some are preventable, and some are not. Either way, you can be sued for any damages you are personally at-fault for. That could include a slip-and-fall accident on your property, or someone having a few drinks at your home & getting into an accident on their way home. Even if the victim has insurance, the insurer can still pursue you for compensation of the damages, which can total tens or even hundreds of thousands of dollars.
Dog bites, for example, are among the most frequently filed liability claims in the U.S. Wisconsin, in particular, is among the top ten states for dog bite claims, with average costs over $34,000 per injury. A severe injury could cost even more, especially if the victim requires surgery or experiences any nerve damage or cosmetic deformity.
As a policy-holder, you are only covered up to the limits you select in your policy. You remain responsible for any damages that exceed those limits, which could threaten your financial future. That is why we here at Pagel & Associates Insurance recommend our home insurance customers purchase personal liability coverage with high limits. Many homeowners opt for at least $100,000 to $300,000 of protection, but one of our team members will be happy to help you determine how much coverage is right for you.
Medical Payments (Coverage F)
If someone is injured while visiting your home, Coverage F on your home insurance policy helps pay for the medical bills. Perhaps a guest needs stitches after hitting her head on your cabinet door. Maybe a neighborhood child sprains her ankle jumping on your trampoline. Regardless of whose fault it may have been, medical payments coverage can help pay for the doctor’s visit, x-rays, or perhaps even a health insurance deductible. It does not relieve you of potential liability, but it may provide enough financial assistance to avoid a possible lawsuit.
Most medical payments coverage comes with limits between $1,000 and $5,000. Talk with one of our team members for help determining how much may be right for you.
A standard home insurance policy comes with broad coverages that correlate to the needs and risk vulnerability of most homeowners. However, some policy-holders need endorsements to provide additional coverage for more specific risks. There are many different home insurance endorsements you can use to modify and build upon your coverage. Examples include:
- Replacement cost coverage for personal belongings damaged due to a covered event
- Scheduled coverage for valuable personal belongings that exceed the limitations of your coverage
- Home business endorsement to cover the business use of your home and assets
- Inflation guard to provide increased dwelling coverage that keeps up with the rising cost of rebuilding your home
- Water and sewer coverage to protect your home against damages caused by a backup
- And more
Beyond Home Insurance
Umbrella insurance can be a valuable supplement to your home insurance policy, providing additional liability protection when you reach the limits of your primary coverage. Many homeowners use umbrella insurance to protect assets and income against expensive litigation better. Most policies come with a minimum of $1 million in additional supplemental liability protection, although higher limits are available.
Umbrella insurance is typically available for an average of $200 per year or less. Talk with an agent here at Pagel & Associates Insurance to request your free quote.