Homeowner’s insurance covers claims for property damage, loss of personal property, and some injuries that occur on the property. Coverage limits, as well as policy limitations and exclusions, may impact claims.
Understanding Homeowner’s Insurance
People who own a home and have a mortgage are almost always required by their lenders to carry homeowner’s insurance. Lenders require homeowner’s insurance to protect the value of the property, but injuries to guests are covered by these policies as well.
Most homeowner’s insurance policies cover the following:
- Interior and Exterior Damages – Although dollar limits for damages vary, most homeowner’s policies include coverage to pay for damage caused by fires, floods, winds, hail, vandalism, and water damage from frozen pipes.
- Damage or Loss of Personal Belongings – Up to certain limits, most policies pay for actual value or replacement cost of furniture, appliances, clothing, electronics, and other personal items. The insurer will require proof of belongings, their value, and their age.
- Accidents and Injuries – Policies cover personal injury claims up to specified limits. Coverage is limited to persons invited onto the property. Coverage does not extend to trespassers, the homeowner, family members living on the property, minor children in the homeowner’s care, or injuries related to a home business.
Personal Liability Claims
The personal liability portion of a policy covers injury lawsuits (up to specified limits per occurrence, usually $100,000) that allege homeowner negligence. The insurance company will not pay to defend against injuries that arise from criminal activities, acts of intentional harm, or harm caused by vehicles.
Liability claims against homeowners for injuries on their property are common. Homeowners are responsible for providing a safe environment for people on their property, especially invited guests. Most liability injury claims result from slip and fall accidents, swimming pool accidents, and dog bites. Dog bites and other dog-related injuries account for more than one-third of all homeowner’s liability claims. Due to the high number of claims each year, many insurers now exclude certain dog breeds that are considered to be dangerous.
When accidents and injuries occur, a homeowner must notify his/her insurance company as soon as possible to report the incident. If an injured party files a lawsuit, the homeowner should inform the insurer and forward copies of legal papers right away.