Why General Personal Liability Insurance?
If you have a homeowners or renters insurance policy, personal liability insurance coverage will be included. It can protect you in the event that you are responsible for an accident inside or outside your home and are responsible for the medical costs of an injured party. It can also protect you from expenses related to damages you may be responsible for outside of your home.
What could be wrong with that?
You see, the problem is that a standard homeowners or renters policy only covers costs up to the limits of the insurance it comes with. If you’re strapped with a larger bill that exceeds those limits, there’s no one else to cover you except…you and your wallet.
Then the obvious question arises.
Do I or do I not need to purchase better personal liability coverage than what is provided in standard homeowners and renters insurance?
In order to properly assess the situation, you’ll need to know how a personal liability insurance policy works.
Personal general liability coverage can protect you from costs you may be responsible for paying (doctor, hospital, and other medical costs above standard insurance limits) in connection with an accident or event on your property that resulted in injury to another person. You can also pay for costs in excess of standard insurance policy limits for property damage. Plus, it can help pay insurance claims that might not otherwise be covered.
The following are associated loss scenarios to study:
1. A homeowner had a visitor to his home. Visitor slipped and fell on driveway and sustained serious injury. Although he was responsible for the medical costs, the homeowners general liability policy footed the $150,000 bill.
2. An insured was walking his dog when a young man approached him. The dog lunged forward and bit the boy’s ear. The coverage kicked in and paid the $60,000 medical bill.
3. A policyholder organized a graduation celebration. One of the guests left after drinking a few glasses of alcohol. His poor driving caused him to drive erratically and ultimately crashed into oncoming traffic resulting in a fatality. The victim’s family sued the host of the party for $1,000,000.
4. Intending to move into a house that he had rented, a landlord sent a 60-day notice to his tenants. Because he disregarded a law that, under the circumstances, he must move into the vacant property within 90 days of notice, the landlord was sued for $20,000 for wrongful eviction by the former tenants of the.
5. Spilled and spilled and spilled until a condo owner’s drain pipe was blocked. Unfortunately, the water backed up and overflowed, causing damage to the condo below and liability to the first owner of the condo. $120,000 worth of damage was covered by personal umbrella insurance.
