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Homeowners Insurance: Maintaining Adequate Liability Coverage

By Compuquotes Team on March 27th, 2008
Homeowners Insurance

When you are in the market for homeowners insurance, there are many components to your insurance policy that you need to consider, in order to properly protect yourself, your family and your possessions. One type of coverage that is included in nearly every homeowners insurance policy but is often not given proper consideration is personal liability insurance. This type of insurance covers any injuries that visitors to your property might suffer, and provides reimbursement for lawsuits and legal expenses as well as medical bills.

Typical homeowners insurance policies include at least $100,000 in personal liability insurance per occurrence and at least $1000 in medical coverage per occurrence. Those amounts are only baseline figures, however, and can be adjusted upwards, and in some circumstances downwards, as may suit your home and its purposes. When deciding the levels of coverage for personal liability that you want to maintain as a part of your homeowners insurance policy, there are several factors you need to consider, including how what other uses you might have for your home besides as a personal residence, the typical flow of visitors to your home and the general condition of your home.

First, consider the uses you will have for your home. Do you intend to maintain a home office within your home? If so, will you entertain clients and/or vendors within your home? Will you run a service out of your home, such as a medical or legal office, or an in-home day care? If so, how many clients might you have at one time, and how often might they visit your office? If you have other uses for your home other than as simply a residence, do those uses carry any inherent risks, such as the use of dangerous equipment? If you have answered yes to any of the questions above, you should consider carrying a higher-than-typical amount of personal liability insurance, to ensure adequate coverage should something untoward occur.

Next, consider the typical flow of visitors you can reasonable expect to come to your home. Aside from its possible use as a home office, will you receive many visitors on a regular basis? Are you a part of organizations where events are often hosted in your home or on your property? Do you have children whose activities and friends often lead to events hosted at your house? Unfortunately, Murphy's Law dictates that the more people come to your home, the more likely something is to happen that can cause damage to property and visitors. If you entertain regularly, for whatever purpose, carrying higher-than-typical amounts of personal liability insurance is advisable. If, on the flip side, you rarely entertain or host people other than members of your household, it is more reasonable to carry baseline amounts of personal liability insurance, as that would be adequate for your needs.

Finally, consider as honestly as possible the general condition of your home. A newer home doesn't necessarily equate with a well-constructed and safe home. Take a look around, and ignore aesthetics, evaluate how likely it is that the condition of your home might contribute to the injury of a guest. Loose or rotted floorboards? Until they're fixed, someone could fall through. Hanging debris outside? This could pose a huge risks. Outlets without GFCI protection? Someone could suffer an awful electrical shock. If the condition of your home could pose any risks to those who visit you, ensure that you maintain adequate personal liability to properly protect both yourself and your visitors. If you move into a new home and begin to undertake home improvement activities, maintain higher coverage at least until the risk factors are resolved.

Homeownership comes with its share of responsibilities and risks. Homeowners insurance is a way to mitigate those risks while fulfilling your responsibility as a homeowner to yourself, your property and your guests. By maintaining adequate personal liability coverage, you can enjoy the peace of mind that comes along with taking responsibility for the health and welfare of all visitors to your home.

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