The neighbor kid is over again. He roams around your house with his shoes on, drinks your milk out of the carton, and is always whining. On top of that, he’s constantly bouncing on the blasted trampoline. You’ve warned your kids not to do flips, but he doesn’t seem to think those rules apply to him. You watch as he jumps one, two, three times and flips…off the edge. Yep, that’s a broken arm. This time he’ll learn. Sucker!

Except that you might be the sucker if you haven’t checked out your home liability insurance policy recently. After all, if the neighbors wanted, they could sue you because their kid didn’t follow your rules and got himself hurt. Fair? Maybe not, but you’ll want to know what home liability insurance is and what your policy covers to make sure you’re insured against accidents like this one.

What is Home Liability Insurance?

When you think of insurance you probably think of insurance against theft of in the case of an accident (like a fire) in your home. However, most insurance policies also include liability insurance which will pay for injuries sustained by other people on your property because of your negligence (think dog bite, broken step, etc). It can also cover costs of another person’s property damage because of your negligence, like your tree falling in the neighbor’s yard. Because we’re usually more worried about our own property rather than Auntie Viola slipping on that patch of ice, we oftentimes don’t check out what is specifically covered should we be sued at any point because of negligence. Knowing what is covered and what isn’t will help you decide if your insurance policy is sufficient, or if you need supplemental coverage.

What Is Covered?

• Injuries you inflict away from home: Liability insurance may cover an accidental injury inflicted by you or an immediate family member off of your property due to negligence. Maybe your son hurts a friend with a BB gun on accident and the friend needs to go to the hospital. These costs may be covered if your son did not intend to hurt the friend.
• Injuries sustained on your property: If someone is accidentally hurt on your property, the liability insurance may pay for his or her medical costs if you are sued. Like I mentioned earlier this might include falls on or in your home or other injuries.
• Property damage: This may cover another party’s property damage sustained either on or off of your property because of your negligence. Maybe your yard work damages the neighbor’s wiring somehow—something like that.
• Defense Costs: If you are sued your liability insurance will provide you with a lawyer who will defend you against claims. You usually cannot choose your lawyer. One will be appointed for you.

Other Considerations

Remember, negligence is a definition that is rather widely used here. You might not have been overtly negligent (once again, the neighbor kid hurting himself on the trampoline wasn’t your fault, but the family would still have a right to sue you if he hurt himself). Also, most policies have a maximum dollar amount that they will cover per incident ($100,000 generally). So if that number does not seem fair to you, or not high enough—especially if you often have people over or have a yard attraction like a pool which could result in possible injury on your property—consider reevaluating your policy or purchasing a personal umbrella liability policy. An umbrella policy is a type of excess insurance that would cover claims not insured by your regular insurance policy and can be a great protection to you and your family depending on your needs.

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