Most people who own a house realize that they need to protect it and their belongings against loss. But they often ask the question: Does homeowners insurance give you both property and liability protection? While there is a distinct difference between property and liability protection, they are both included in the coverage a homeowners policy offers.
Here is what you need to know:
There are four types of coverage a homeowners policy provides
- Coverage for the structure: The policy will pay to repair or rebuild a home if it is damaged or destroyed by fire, hurricane, hail, lightning, or any other disaster listed in the policy.
- Coverage for personal belongings: Furniture, clothes, and other personal items are covered if they are stolen or destroyed.
- Liability protection: This part covers against lawsuits for bodily injury or property damage that policyholders or family members cause to others.
- Additional living expenses: This will pay the costs of living away from home if a house is inhabitable.
As you can see, property and liability protection are included in the same homeowners policy, but what is the difference between the two coverages?
A standard homeowners policy will pay to repair or rebuild your house if it is damaged or destroyed by fire, storms, or other insured disasters. It typically pays for garages, gazebos, and related structures, although there are usually limits based on the value of the home.
These policies, however, do not cover flooding, earthquakes, or inadequate maintenance. Flood coverage is provided by the federal government’s National Flood Insurance Program and can be purchased through an insurance agent. Earthquake coverage can be obtained either in the form of an endorsement or as a separate policy. The homeowner is responsible for most maintenance-related issues.
Your daughter’s friend falls and breaks her arm while playing tag on your patio. A salesman trips over the bicycle your son left in the middle of the sidewalk. A large limb from that old maple tree in the side yard broke off and damaged your neighbor’s roof.
Liability insurance covers you from loss or claims that resulted from damage or accidents like these to others in and around your house. Homeowners liability coverage typically covers about $100,000 in damages, but you might want to consider buying more coverage, especially if you’re living in an area where jury damage awards tend to be higher than normal.
Homeowners insurance medical coverage
Also known as Coverage F of a homeowners policy, medical expense coverage pays the bills of anyone who is injured while on your property. This coverage applies when a guest is injured at your home, whether you’re at fault or not. Medical expense coverage is meant for small claims.
A frequent concern of homeowners is knowing which type of liability limit applies to medical payments coverage. That amount can vary by state and policy, but it usually has a limit of $1,000 to $5,000. Homeowners decide on the amount of coverage they believe will be sufficient.
Here is an example of how it would work if you needed it: You invite some friends over for a cookout, and one of them cuts his finger while slicing onions for the burgers. It isn’t a serious injury, but he goes to urgent care where they stitch it up. Medical expense coverage would pay for the treatment as long as the costs didn’t exceed the policy limit.
This type of third-party coverage on your home insurance policy helps you to avoid potential litigation.
Home insurance personal liability vs. medical payments
Keep in mind that personal liability and medical expense coverage have different functions.
The much higher limits on personal liability coverage are designed to help protect you against the costs associated with bodily injury and property damage for which you are found legally liable. Most insurers offer limits that range from $100,000 to $500,000.
On the other hand, medical payments coverage is associated with injuries that happen to guests at your home. Medical expense coverage will reimburse the injured individual, and it comes with much lower limits that are between $1,000 and $5,000.
Still have questions?
Ask the insurance professionals at NSI Insurance Group to clear up any questions you might have on the difference between property and liability protection. We are a knowledgeable and experienced independent insurance agency in Miami, Florida, representing the finest and most reputable insurance companies.