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HouseMany homeowners don’t consider the role of personal liability in their Georgia home insurance policy. There is an understanding that insurance covers loss from theft, fire, or natural disasters, along with home content and personal possessions. Most policies provide some coverage for personal liability, but it is often very minimal. 

Liability is the major part of most auto insurance policies, and drivers understand the concept of damage to another driver and the consequences of an injury claim, but there is an assumption that liability is less important for home insurance. An issue of personal liability, however, should not be underestimated. A severe accident on your property could trigger a costly court award to the injured party. If you are judged personally liable and your liability exceeds the amount of your liability coverage, you could lose your home, your assets (including retirement funds and insurance), and even a portion of your future earnings.

Personal liability refers to your responsibility for damage or injury to another person while on your property. It is intended to protect you and your family in case of a lawsuit. This could include an accident that happens due to some deficiency on your property. For example, someone slips on the icy sidewalk because you haven’t adequately cleaned it. Or the mailman trips on a bicycle left on the front step. Dog bites are a common liability issue, affecting both visitors inside the home and neighbors or passersby outside. Your children playing baseball may break windows or damage the neighbor’s property. If you have a trampoline or swimming pool on your property, you are liable for any injury or drowning. In the case of swimming pools over a minimum size, additional coverage may be required.

Personal liability insurance is intended to help fill in the gaps in your standard home and vehicle insurance. It extends to things like false arrest, detention or imprisonment. Invasion of privacy and wrongful entry or eviction are also covered, along with libel, defamation of character and slander. For example, you write a letter to the editor accusing your neighbor of a crime, and he sues you for slander. An umbrella liability policy can protect you and your family against legal costs that can accumulate as a result of these types of situations. It also covers employees, for example, a nanny working in your home, and protection extends to you while traveling. Personal liability insurance can also cover the shortfall should a serious injury occur while you are driving and the court award is greater than your auto insurance policy limit. The definition of personal injury includes injuries (and any resulting sickness or death), physical harm, subsequent care required, loss of employment/services, and any mental anguish that accompanies the incident.

Here’s how it could work. A cyclist passing your house is attacked by your dog and bitten, falling from the bike and sustaining an injury. You are liable for not only the injury, but medical expenses, any costs associated with healing and rehabilitation, loss of employment and emotional trauma. Should the cyclist decide to take you to court, alleging that you were negligent in allowing your dog loose, you are liable for the court costs. Your personal liability insurance will cover all of these costs up to a set limit. Costs will also be covered if you are away from your premises - say, for example, the dog bite occurs while you are walking in the park.

Another example would be if your teenager had a wild party while you were away. One guest claims she was assaulted while on your property, a group of party-goers go on a spree smashing car windows down the street, and a drunken guest falls in the pool and sustains an injury. Your personal liability could quickly escalate. If it is discovered that you bought alcohol for the party – you might well find yourself with no liability coverage under your homeowner’s policy, since most policies will cover you for negligence, but not for intentional or deliberate damage.

There are many other ways liability insurance could come in handy, and whether you choose additional coverage will depend on your lifestyle and your personal level of risk. Here are a few examples where risk could quickly escalate beyond the limits of a standard liability policy:

  • While golfing, your ball hits another golfer on the fairway. He is severely injured and in a coma. His family sues for loss of income. The injured party is a Wall Street executive.
  • Your teenagers are partying in the backyard and throw a firecracker onto the street. It blows up your neighbor’s garage, in which he parks his collection of priceless classic cars.
  • You recently won millions in a lottery. An opportunistic neighbor claims he tripped on a toy your child left on his sidewalk.
  • You host a beach party for your daughter. One of the party-goers tosses a propane tank into the bonfire and the resulting explosion seriously injures dozens of people. You are sued for not adequately supervising the party. 

There are many other potential situations where liability can result in devastating financial consequences. Situations may be completely beyond your control, they could be preventable, or they might be completely unfair, but if you are found personally liable, you need liability insurance. How much personal liability is covered and what your limits are will depend on your individual homeowner’s insurance policy. 

Read the fine print carefully, and talk to your insurance agent so that you know what you might be responsible for should someone be injured. If you feel the standard coverage is insufficient, you may find an additional umbrella liability policy is well worth the investment.

Please feel free to contact us directly by give Peachstate Insurance a call at 877-997-2478 to get a free insurance quote.

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