How much homeowners liability do you need? It’s not a simple question. Homeowners liability insurance covers you in case a guest is injured in your home. Such an injury could lead to medical bills, lost wages and other expenses. You need enough to cover that—otherwise, you’ll be required to pay out of pocket. This is why you also need enough coverage to protect your personal assets.
If you haven’t looked at your homeowners liability limits in a while, now is a good time. Here are 10 reasons you might need to raise your limits.
- You have the standard $100,000 limit. Many homeowners liability policies come with a standard limit of $100,000, but this isn’t much when you consider everything it’s supposed to cover.
- You have more net worth to protect. If you purchased your policy years ago, your net worth may have increased since then. Protect it by increasing your limit.
- Medical costs are rising. Homeowners liability policies cover medical costs associated with an injury that occurs on your property. Because medical costs are rising, your limit should also go up.
- You need to cover legal costs. If you are sued, you may have expensive legal costs. Make sure your policy limits are high enough to cover this.
- Wages are rising. If a person is injured on your property and unable to work, you can be sued for lost wages. Although wages took a hit during the recession, they are rising again. This is good for the economy, but bad if you’re being sued for someone’s inability to work. Make sure you have enough coverage.
- Pain and suffering can vary wildly. If someone is injured on your property, you can be sued for pain and suffering. This amount can vary significantly, and you want to be ready for it.
- You’re sharing your home. If you’ve been making money with short-term home rentals—think Airbnb—you need to make sure you’re covered for the increased risk. In addition to increasing the limit, you need to obtain commercial coverage.
- You’ve added a swimming pool. No one will blame you for wanting to enjoy a swim, but having a pool increases the chance of an injury occurring on your property. According to the Consumer Product Safety Commission, an average of 4,900 children under the age of 15 received emergency medical treatment for pool or spa related injuries each year between 2011 and 2013.
- You’ve gotten a dog. According to the Insurance Information Institute, dog bites are responsible for approximately one-third of all homeowners liability claims. If you have a pooch, you need to think about insurance.
- It’s a good deal. Increasing your limit generally won’t cost you very much, especially compared to the extra coverage you’ll receive. The peace of mind is a good deal.
If you’re interested in raising your homeowners insurance liability limits, contact your FICOH independent agent for a quote.