You probably already know that your homeowners' insurance covers you when wind or fire damages your house, or when someone is injured in an accident (like a slip and fall) while on your property. But what about accidental harm you might cause while you're away from your property? In this article, we'll discuss:
Accidentally injuring someone or damaging property can end up costing you a lot of money—especially if the injured person gets an attorney and sues you. Attorneys look for money, and the equity in your home is an attractive option. To help protect against this, homeowner's policies usually provide coverage both for accidents that happen on your property (like slip and fall claims) and those that occur away from your home.
Your homeowner's insurance does not cover accidents that happen in your car. That's where your automobile insurance comes in. Not all accidents happen on the roadway, however. For example, if you accidentally dump your piping hot casserole on your pastor while at the church social, or you sideswipe someone's head with your skis in the ski lodge, your homeowners' policy may protect you—as long as you did not do it on purpose, that is.
The law expects everyone to act reasonably at all times. If you don't do what a reasonable person would do in the same situation, and someone ends up getting injured as a result, the law says you are "negligent."
For example, a reasonable person looks ahead when walking down the street. If you accidentally knock someone down while you're looking at your phone, you may be negligent because you weren't watching where you were going.
The good thing is your homeowner's policy usually covers you and your family's negligent behavior no matter where it happens. For example, if your son accidentally hits a baseball through your neighbor's window and you have liability insurance, it's probably covered. If your toddler son darts in front of an elderly woman walking in the mall and causes her to fall, your policy should take care of her injuries too.
Learn more about fault for an accident.
Your homeowner's policy will not cover intentional acts in which you purposefully try to hurt someone or damage property. Examples include assault and battery, vandalism, and workplace or sexual harassment. Standard homeowner's policies do not cover these types of actions. (Learn more about intentional torts.)
Getting documents with the words "Summons" and "Complaint" at the top is a sure sign someone is suing you. When this happens:
Learn more about what happens when you get sued in small claims court.
If your homeowner's insurance covers the action, you may be in luck, because there are a number of potential benefits.
The insurance company assigns an experienced attorney to your case. The attorney responds to the complaint and decides the best course of action for the lawsuit. You still need to help the attorney defend your case, however. This includes:
Having said all of that, keep in mind that in most instances, the insurance claim will reach a settlement with minimal participation from you.
Liability insurance pays for the things that the people suing you are asking for—such as the cost of accident-related medical care, property damage, and the physical and mental "pain and suffering" caused by the injury.
Your insurance coverage also pays for your litigation costs, such as expert witness and jury fees, as well as the other side's attorneys' fees (if payment of those becomes an issue).
While liability insurance is standard in most homeowners' insurance policies, there is no law that requires you to have this kind of coverage. So, it makes sense to check with your insurance company and make sure that liability insurance is included in your policy. It could be invaluable if you find yourself in any of the situations we've discussed here.
Any time you cause an injury or damage to someone else's property, and you think you might face a lawsuit, it's important to act quickly to protect yourself.
As we mentioned earlier, your best first step is to figure out if any insurance policy you hold might come into play:
If the incident is covered, a representative of the insurance company will walk you through what you need to do next.
If the incident isn't covered by your auto or homeowners' insurance, and there are no other potential sources of insurance coverage (like an umbrella policy), you'll likely be personally on the financial hook if someone sues you. At this point, it might be worth it to discuss your situation with an experienced legal professional. Get tips on hiring and working with a lawyer.