Cheap House Insurance

Homeowners’ insurance covers the facilities, contents and people of the home if at least one of the owners or ‘named-insured,’ lives in the home. Income property, like a house you rent out, may have some of the same types of coverage, but the insurance policy has a different name.

What Is Liability Coverage?

If someone slips on your sidewalk and needs stitches, or your dog gets out and bites the teenager down the street, liability coverage pays for that. It covers damage done to others and their property when it’s your fault. If somebody sues you for that damage, it also pays for legal fees.

This coverage will protect you financially from the costs of medical payments and lawsuits for injuries and property damage. If the accident happened on your property, or you or the family members living in the home, were liable for injuries and damage that occur away from home, this coverage will help pay the incurred charges up to the policy limits. This part of the policy also covers damage caused by your pets.

Liability insurance doesn't have a deductible like the other coverage included in your policy. The insurance company will cover the costs at the first dollar of loss and pay the price in full up to your specific limit.

How Much Should Liability Coverage Should I Have?

Most standard policies provide a basic liability limit of $300,000 for property damages or injuries. This amount can be increased for an additional premium. The coverage will also have a medical payments portion of the policy. This would reimburse you for medical bills incurred with a liability claim.

The standard medical portion of the policy carries varying limits. These limits could be $1,000 or $5,000. This amount would pay the expense for minor injuries that occur on your property.

The calculation to figure out what you need is based on taking your assets and subtracting your debts to come up with your net worth. Make a quick estimate by adding your salary, home equity, the value of any investments and real assets like art, jewelry and other real estate. If you have a business, include its value. Now subtract any debts. Credit card balances, student loan balances, medical bills, etc. It is suggested you have liability coverage that is at least as much as your net worth.

This comes from the belief that you should have enough coverage to protect what you have. In this day and age, people sue. In a litigious society it is almost expected for someone to sue you if they are injured by you or on your property. If your net worth is a lot more than your liability limits, the injured party could sue you for over those policy limits and you would have to pay the difference.

Everyone is different. This is something you need to talk with your agent about and every five years or so make sure the limit still makes sense.

Optional Umbrella Policies