Protect Your Worldly Possessions

The liability portion of your homeowner’s policy is designed to cover expenses of an accident or injury that occurs on your property. It does not cover intentional damage you inflict. Depending on the state you live in, you may be held accountable only to the extent you contributed to the incident. For instance, if your dog bit somebody because they were setting its tail on fire, you may not be held accountable at all.

Homeowner’s liability insurance does not cover an incident connected with any commercial enterprise. For instance, if you have a home business that involves clients or customers coming to your house, your homeowner’s policy will not cover you if your customer trips and breaks a leg. You would need a separate business liability policy just like any doctor, auto mechanic, or owner of large and dangerous equipment.

A typical homeowner’s policy is for $100,000, a measly amount considering medical costs these days. If you want to increase coverage, the increase in your premium payments, and your peace of mind, may be well worth the cost.

An additional type of liability coverage is called an ‘umbrella policy’. This is a policy for liability only and provides additional coverage for your home and your car. Now, why would you want even more liability insurance? Given the size of some insurance settlements granted by courts, you may need additional coverage if you have sizeable assets. We live in a litigious society and there are people who make a career out of ‘accidents’. Who is the most logical target for the unscrupulous? Naturally, the folks with the most to lose. If you have assets to protect, or if you are conspicuously wealthy, (or only perceived so), an additional umbrella policy could help you sleep nights.

The legal atmosphere may be slowly changing. The concept of ‘joint liability’, where the plaintiff involves, for instance, the manufacturer of the rake you left lying on the walkway, is being revisited in many areas. Also becoming more popular are ‘alternative dispute resolution’ processes. Your problem may go to arbitration, where a third party plays Solomon and pronounces the solution. Or the problem may be addressed by mediation, where a third party tries to arrange a settlement, or compromise, between two contenders. It will be interesting to see how this all plays out. Most people are disgusted by both flagrant greed and blatant disregard for the safety of others. One idea is for ‘punitive’ awards to go not to the plaintiff, but toward charities or local government. The actual damage portion of a settlement would not be affected. Perhaps a sense of balance will enter into it. Maybe a pandemic of common sense might break out and render many of these issues irrelevant.

Your best bet is a combination of good insurance coverage and conscientious home care. So pick up that rake, make sure your porch light works, and fix that loose board. And pay your insurance premiums on time.

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