Five Holiday Mishaps: Does Your Policy Cover That?

Courtesy of Safeco Insurance

You know your homeowners insurance protects you if fire damages your home or burglars make off with your valuables. But did you know the typical homeowners policy also includes liability coverage?

Depending on the specifics of your policy, liability cover typically provides:

Coverage against the cost of lawsuits for damages that were caused by you, by family members, or by your pets.
Assistance when you injure other people or damage their property.
Medical coverage for visitors injured in your home.
How does that apply in real life? Take a look at these possible – but we hope improbable – holiday scenarios and the most likely coverage outcome for each. These are only theoretical situations. Every claim will require a full investigation and coverage can only be determined based on the specifics of each loss.

1. Negligent Nephew
As a responsible host, you keep an eye on who dips into the eggnog at your party. But you miss your 22 year old nephew’s second and then third visits to the punchbowl. At the end of the night, as he backs out of your driveway, he injures a passing caroler. That caroler later sues you as the responsible party. In this case, the liability coverage on your homeowners policy would likely provide a defense for you, but probably not the nephew. After all, he’s not a member of your household or under your legal guardianship.
2. Clumsy Daughter
Your young daughter is fascinated by the glass sculpture at your boss’s holiday get-together. She wonders what it feels like…oops! Crash! Your daughter may not be negligent, due to her age, but you could be. In that case, the damage may be covered under Property Damage to Others, if you have that on your policy.
3. Aggressive Shopper
You’re normally calm and courteous, but that changes when you see there’s only one video game system left at 75% off. You don’t remember throwing that elbow, but the store’s security cameras see it differently. Now you’re being sued for the broken arm the other shopper sustained in her fall. This could be seen as an intentional act and therefore may not be covered. Liability coverage, after all, is for accidents.
4. Decorating Dynamo
You’ve designed a rooftop lighting display that will be the envy of the whole neighborhood. However, while carrying Santa up to the top, you slip off the ladder and break your leg. Don’t expect your homeowners policy to cover injuries to you. Your liability coverage is for injuries to others. This accident calls to your health insurance.
5. Auntie’s Ankle
Your Aunt Marge visits your home for the holidays. In the excitement of her arrival, the rug in the entryway gets rumpled. Aunt Marge stumbles and breaks her ankle. It’s likely your liability coverage would go toward her medical expenses. What if Aunt Marge tripped on a rug in a banquet hall you rented? In that case, her medical expenses are more likely to be covered by the banquet hall’s policy, not yours.
Now is the time to review your own policy. You might be covered for $300,000 in liability costs, a fairly standard amount. Perhaps you’re covered for $500,000. How much is enough?

The Insurance Information Institute recommends having enough liability insurance to help protect your assets. Is the liability limit on your policy more than the combined value of your property, investments, and savings? If not, now may be the time to increase it. Talk to an independent insurance agent to better understand your options.

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