Texas home insurance policies, like policies in most other states, are divided into sections. The first section outlines the core property coverage, which I introduced last week (see http://184.108.40.206/~wiseinsu/home-insurance-core-property-coverage/). The second section outlines the policy’s liability coverage which is designed to protect the homeowner financially if something happens in the home or on the property.
There are two types of liability coverage, medical coverage and personal liability. Medical coverage is designed to cover medical expenses if someone is hurt on the property, whether invited or not. It does not cover the homeowner or anyone who lives in the home. The limits of coverage usually range from $1,000 to $5,000 and the difference in cost is minimal between the two amounts.
Medical coverage can be used whether or not the homeowner is legally liable for the injury. Examples of how it may be used include medical expenses incurred to take someone to the hospital to be examined after a fall, stitches, or even a run to the dentist because a tooth was knocked out. Other covered cost include x-rays, nursing care, and even pay for an ambulance.
Personal liability coverage is used when you are responsible, or legally liable, for bodily injury or certain types of property damage to a person who’s not a member of your household. Personal liability limits usually start at $100,000 and go up to $500,000 with the difference in cost being nominal.
Examples when this coverage may apply include a dog bite, a slip and fall, or damage done to a neighbor’s home by your child’s baseball or softball. Not everything is covered, however, as each insurance company lists exclusions to coverage in the policy itself. For instance, if your car rolls out of your driveway and into your neighbor’s house, that will be a car insurance claim. Another example would be if someone was hurt in your home but they were there for business or professional activities which are related to a home office.
One of the questions I’m asked, is how much medical and personal liability coverage is needed. I usually recommend most homeowners carry $5,000 in medical coverage and a minimum of $300,000 in personal liability coverage. For people with a combined household income over $125,000, or who have a swimming pool or trampoline, I recommend $500,000 of liability coverage. What do you think? Share your comments or questions with me on our Google +, Facebook, or LinkeIn pages. I’d love to hear from you!