Example of Homeowners Liability that Goes Beyond Your Home
One misconception about homeowners liability insurance coverage is that it only covers incidents in the home. In actuality, the Comprehensive Personal Liability (CPL) coverage under a homeowners insurance policy is really not associated with any location, other than the limitations and exclusions on the policy. Here are some examples of what probably would be covered by CPL:
» Sports Incidents: For example, you are playing golf and you drive the ball that hits someone in the head and disables them. If you are found liable, as long as you were not doing it professionally, your policy will likely provide coverage.
» After shopping at your local market, you accidentally drop a bottle of olive oil in the parking lot, and it shatters and bleeds the oil onto the pavement. Another shopper comes long, slips and seriously injures themselves on the pavement. While the assumption is the injured party will take action against the market, the typical practice of attorneys is to go after everyone associated with the incident.
» You are on vacation at a hotel, and you are so excited to leave the room to enjoy a sightseeing tour that you forget to turn off the faucet. The running water causes significant damage to the hotel structure. The hotel decides to go after you for damages; your CPL will defend you and may pay out damages if you are deemed liable.
» Your kid lends his skateboard to a friend, and the friend, who may not be experienced with the skateboard, gets seriously injured trying to make a maneuver. Parents can be held liable for this injury and there is a very good chance this will be covered by the CPL coverage.
» If your dog bites a stranger at the park, your CPL will cover you as the owner and responsible party for the dog, as long as the policy does not exclude coverage for your dog breed. Some homeowners policies exclude coverage for breeds deemed "dangerous," such as pit bulls.
Additionally, the CPL coverage will usually extend coverage for the following items, even if an incident happens away from the insured premise. Here are some examples:
» Trailers that are not attached to a motor vehicle
» Motorized golf carts are typically included in coverage
» Watercraft that does not have a motor or is not more than a specified amount of horsepower
» Sailboats below a certain length
» A vacation residence; however, certain conditions may apply; you also may need to schedule it
» Non-motorized bikes
Here are examples where coverage does not exist and is excluded by nearly every homeowners insurance policy:
» Your cars are clearly excluded. This is exactly why there is need to get a separate auto insurance policy.
» Motorized recreational vehicles, most especially if they are off premise.
» Any incident related to business. Almost all homeowners policies exclude business incidents.
» Intentional acts. Most policies have language against intentional acts.
Policies vary, so it is important to review your policy to see what may be covered and what may not be covered. Additionally, some policies allow you to endorse a coverage that may not be on the policy. This is why it is so important to sit down with your agent to address additional risks you may have and make sure coverage for those risks is addressed. Liability coverage is perhaps the most important coverage you should have, simply because most of these cases involve attorneys and if coverage exists, the insurance companies provide for your defense, as well as any settlement for up to the limits of your policy. This is why it is so important to review your risks with your agent.
-Lucas R. Zeiler