Purchasing your first home is one of the most exciting events of a person’s life. But it can also come with some new responsibilities. One of the most important is choosing and purchasing a home insurance policy.
If you are about to become a first-time homeowner, you may not understand what an insurance policy covers. Read on to learn about home liability insurance, and how it differs from regular property insurance.
What Insurance Does
Just like when you get automobile insurance and health insurance, home insurance protects you — and your finances — in the event of a problem. For example, let’s say a tornado rips the roof off your house. Or there’s a fire that destroys your kitchen. In both these cases, homeowner’s property insurance will cover the cost of repairing the damage.
Most standard insurance policies will also pay for you to stay elsewhere while your home is being repaired if it is unliveable following the disaster.
But because your home is a place where friends and family can visit, you need additional coverage. That’s called home liability insurance.
Home Liability Insurance
This type of insurance is a little different. Its purpose is to help you in the event that someone gets injured while on your property. It may also cover damage to another person’s property that is caused by you, your family, your pets, or an object on your property. Let’s take a look at each type.
A guest attending your annual Backyard BBQ Bash and Potato Salad Cookoff trips over a grill and breaks her leg. Or your sister-in-law slips on a loose throw rug and falls down the stairs, causing a concussion. Lastly, what about if a door-to-door salesman is bitten by your vicious teacup poodle?
In each of these instances, your insurance will cover the costs related to the victim’s medical treatment. Or, if they decide to bring a lawsuit against you, your coverage will extend to your defense costs to protect you from these liabilities. The insurance company will even assign you an attorney.
Damage to Another’s Property
A good example of this type of incident is your son’s errant baseball crashing through your neighbor’s window. Or maybe a big windstorm has caused that old maple tree of yours to fall — and crush the fence next door. The insurance payouts to the people whose property has been damaged can help you avoid a costly and emotionally difficult lawsuit.
Host Liquor Liability Insurance
Here is another common type of home liability insurance: liquor liability insurance. It is usually included in traditional homeowner’s insurance, but check with your agent to make certain. This covers you if a claim is made that you served alcohol to an intoxicated guest, who later caused an accident and injured someone else.
Why Take Chances?
Home liability insurance isn’t the most exciting purchase you will make. But it is one of the most important. Ensure that you have a “happy ever after” in your new home by taking care of this responsibility.
Looking to save some money after buying a house? Check out the Budget section of this blog for creative ideas!
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