If you were injured on someone else’s property and trying to decide whether to file a lawsuit, it is good to know how the responsible party’s insurance policy can pay out for your injuries.
A standard homeowners policy typically includes two types of liability coverage.
If you don’t file a lawsuit, the responsible party might file a MedPay claim with their home insurance carrier which provides limited repayment for injuries when a lawsuit is not presented. Most policies, however, place a maximum limit of $1,000 for this type of coverage. With medical costs rising this is often not enough to cover hospital and doctor’s bills, ambulance rides and other expenses related to your injury.
If you decide to file a lawsuit for your injuries, the responsible party’s home insurance policy might still come in handy. The other type of liability coverage included in a home insurance policy is called personal liability protection.
Personal liability protection will allow a policyholder to file a claim and receive financial assistance if he or she is being sued. The follow scenarios are examples of accidents that could qualify a homeowner for a claim:
- Their dog bites you while you are walking past their home.
- Your child falls off a neighbor’s trampoline and fractures his ankle.
- You are involved in an accident where another driver is at fault and their auto liability coverage is not enough to pay for your injuries
There are many reasons a person might choose to sue after such a mishap. Medical bills are costly, plus there are other associated expenses. The hurt party might miss weeks of work, or the injury could have negative long-term effects on the person’s health. These costs add up, and that is why many individuals seek legal action.
Standard home insurance policies typically include a minimum of $100,000 for a liability claim. Again, however, coverage can be increased to as much as $500,000. Criminal activity and other exclusions apply. The following circumstances probably won’t be eligible for home insurance coverage:
- Transmission of a communicable disease.
- Mental, physical or sexual abuse.
- The selling, manufacturing or distribution of controlled substances.
How do you protect yourself?
So you know now how easily accidents can happen since you were the victim of one. So how can you protect yourself from the financial burden of a lawsuit? Of course, it’s always best to prepare for the worst-case scenario ahead of time. Consumers who feel that they’re at particular risk for a lawsuit can purchase umbrella coverage – which comes in increments of $1 million up to $5 million. These people might own a pool or live in a neighborhood with a lot of unsupervised children and worry that someone might get hurt on their property. Umbrella coverage kicks in once the limits of your personal liability have been met. It also applies to your automobile insurance once those liability limits have been met.
Whether you’re the plaintiff or the defendant, it’s good to know about financial options when facing a lawsuit. When in doubt about your insurance coverage, get in touch with a licensed agent. A professional can answer any question you may have and get you the coverage you need. You can discuss premiums, deductibles and other important aspects of a policy as well.
This article was contributed by Carrie Van Brunt-Wiley, Editor of the HomeInsurance.com blog. Carrie has been writing insurance news and consumer information for HomeInsurance.com since 2008. She graduated from the University of North Carolina in Wilmington in 2005 with a B.A. in Professional Writing and Journalism.