Insurance isn’t just about protecting your own person and property – it’s also about ensuring that if you are responsible for damage to another individual, you can meet your financial obligations. Holding the right personal liability insurance is an important way to reduce your financial risk.
What Is Personal Liability Insurance?
Personal liability insurance protects you in case a personal liability situation arises. For example, if an accident occurs in your home or as a cause of your actions, and if this results in another person being injured or their property being damaged, you can be held liable for the ensuing costs. In a personal liability situation, these costs might include medical bills, repair fees and legal fees.
As you can imagine, the costs following a serious accident, injury or property damage incident can add up quickly. If you’re found liable for the event, this could mean a major chuck of change coming out of your bank account – but personal liability insurance can help you to cover these costs and protect your finances to at least some extent.
Who Needs Personal Liability Insurance?
Anyone who owns a home, drives a car, or operates any kind of vehicle such as a motorcycle or a boat should have personal liability insurance. Indeed, this may already be included within your current insurance policies. Many states mandate that every car owner holds liability insurance as standard, and home insurance policies often include liability coverage as part of the overall package.
If you’re not sure whether or not you’re covered for personal liability costs, get in touch with your insurance provider and ask! Make sure that various types of liability are all covered, including incidents regarding bodily injury, property damage, medical payments, auto expenses and so on. And, if you find that you do have some insurance but are concerned about protecting other wealth and assets, you might look into adding on umbrella insurance to your existing policy – otherwise known as policies that can further save your assets if something goes very wrong.
When Does Personal Liability Insurance Kick-in?
Personal liability insurance kicks in when you are found negligent for an incident that’s affected another person. For example, if a guest is visiting your house and he slips on the floor and breaks a bone, it’s possible that he could sue you for the cost of hospital bills, lost salary during the medical procedures, and so on. Similarly, if you are driving and experience an accident, which is found to be your fault, you could be responsible for the other driver’s car repair or medical costs.
At that point, your personal liability insurance would help you to pay out any money that you must pay to the other party in the personal liability suit. These kinds of suits can result in damages amounting to thousands or even tens of thousands of dollars, or more – so not having liability insurance is a risk.
What’s key with a personal liability insurance policy is to contact your insurer as soon as you become aware of any potential lawsuits against you. Be sure to read your insurance policy closely to understand exactly what actions you need to take in case a suit arises; as failing to take these specific steps could affect your ability to access your liability insurance coverage to its full extent available.
What’s Not Covered?
It’s important to understand what’s covered and what’s not in your personal liability insurance. Typically, your personal liability insurance won’t cover incidents that arise as the result of business or professional activities, although depending on your occupation, it’s possible to add this coverage into your policy. Again, check in with your insurance provider if you think you could benefit from having this additional protection.
Another common exclusion for personal liability coverage is water vehicles; normally, you will need a separate policy for this kind of coverage, which could be beneficial if you spend a good deal of time on or around boats. A separate policy for aircraft liability would also be necessary.
In addition, personal liability insurance does not cover intentional harm. In other words – your personal liability policy won’t protect you or your family members from the legal or financial ramifications of a crime that you’ve committed. Moreover, injuries to yourself or your family, or damages sustained to your own property, aren’t covered by personal liability insurance.
Who Should I Contact for More Information?
If you want to learn more about personal liability insurance or you’re considering purchasing, changing or updating your policy, get in touch with a trained financial consultant and insurance provider for more information.
