When you think about insurance, you likely think about a provision to fix or replace your car in the event you’re involved in an accident. You may also think about not having to pay for your medical expenses at a hospital when you or your immediate family members fall ill.
But what about the instances when you’re found liable for causing injury or damage to other people’s property? This is where property damage insurance comes into play. If you’re involved in a car accident and cause damage, you won’t have to go into your savings to replace the other party’s car door or windshield.
This form of insurance is not limited to auto insurance; it can indemnify you against claims by people who suffer an injury while on your property.
Is property damage liability insurance really necessary, you might ask? What are the chances you will cause damage to other road users, being the ultra-cautious driver that you are? Or that anyone will break an arm while visiting you? Plus, you could already be shouldering premiums from a thousand other policies.
Before you shelve the idea of signing up for property damage insurance, it wouldn’t hurt to find out some of its benefits. Here’s a snapshot of what this kind of cover can do for you.
The Difference Between Property and Liability
As a homeowner, it is important you understand the difference between property and liability insurance and the distinct purpose of each. The former will compensate you for structural damage to your house that will require it to be rebuilt, while the latter covers claims against you by people who suffer loss while on your property.
Say someone decides to take legal action against you for injuries sustained in your house and the resulting pain and suffering or loss of income. Liability cover will cover everything from whatever the court decides is adequate monetary compensation for the loss to your own legal fees.
Common types of property insurance include policies that cover damage by fire or explosions. Homeowner policies will also cover damage caused by lightning, hailstorms, floods and other natural phenomena.
Liabilities
Liability cover will compensate you for your visitors’ medical costs after getting injured on slippery tiles or a broken stair. Even though they may have their personal medical scheme, they may want to take action against you for what they feel is your negligence.
Your liability insurance, depending on the terms in your contract, will cover those bills plus compensate for any emotional trauma or loss of wages your injured visitor may claim to have suffered. In the unfortunate event that the injuries lead to death, your liability coverage will compensate their dependents.
Liability coverage is not limited to events happening to other individuals; it will also cover you away from home. If you happen to break something at the hotel you’re staying in while on vacation, your personal liability cover will help sort out claims the hotel may make against you.
Coverage Limitations
Amazing as liability cover sounds, there are limits to what it can cover. If your dog strays into your neighbor’s yard and bites someone there, this cover won’t help. This mostly applies to dog breeds considered high-risk. Family members injured at home also won’t be covered by liability insurance. Lastly, state guidelines dictate limits to what your liability insurance pays for.
The Advantages of Liability Protection
It also covers damage you or your family members cause to other people’s property. If your children happen to destroy a neighbor’s flower garden in the course of their play, you won’t have to pay them from your pocket.
The damage to your neighbor doesn’t have to be caused by you or your children for compensation to be triggered. An aged tree in your yard could fall over and crash into a neighbor’s roof. Your liability coverage will also take care of whatever claims your neighbor makes against you.
Auto Coverage
If you are a car owner, you will be happy to know that liability cover also extends to damage caused to others while using your car. Auto insurance companies have products that cover injury or damage to other parties caused by motorists. But you can get similar coverage from your property damage liability policy.
Make a Well Informed Decision
The extent to which your property damage liability cover indemnifies you depends on the product you sign up for. For this reason, you will want to shop around thoroughly and compare home insurance quotes before you settle for any policy. Be sure that your cover offers you real value for money, covering all types of risk that can arise within your setting.
