Coverage for Homeowner Insurance Claims

What happens if you’re hurt in your own home? What about immediate family members and other relatives? How about visitors? Who does your homeowners insurance cover, and what amounts will your coverage pay if someone files a homeowners insurance claim? Here are the answers…

You and your family

Your homeowner’s insurance will generally not cover injuries to you or your family members. It will not provide for lost wages, out-of-pocket expenses, or pain and suffering. Whether or not your negligence caused the injuries doesn’t matter. You and your family members aren’t covered.

For example, let’s say your uncle Andy celebrated Thanksgiving dinner at your home. While walking down the stairs, he slipped and fell when the banister he was holding on to broke loose from the wall. When Andy fell, he broke his wrist.

He said you were negligent and wanted to file a claim against your insurance company to pay for his medical bills, prescriptions, lost wages, and pain and suffering. In this case, your apparent negligence doesn’t matter. Because Andy is a relative, your policy won’t provide coverage, even if he sues you.

To cover injuries you or family members suffer, you need to purchase private medical insurance. Coverage under a health maintenance organization (HMO) or preferred provider organization (PPO) will normally provide medical-related expenses for doctors’ appointments and hospitalization.

Depending upon the type of HMO or PPO insurance plan you have, coverage may also include diagnostic and preventive medical care as well. HMOs and PPOs normally cover you and immediate family members. To cover relatives requires you add them to your policy.

Invited Visitors

Homeowner’s insurance generally provides three types of coverage for injuries suffered by non-family members.

1) Liability coverage

The liability portion of your homeowner’s insurance policy will cover you when non-family members are injured and they file a lawsuit. Most homeowner policies cover the costs of legal expenses, settlements and court judgments up to $100,000 per occurrence. Under the liability portion of your coverage, there shouldn’t be a deductible.

For a little higher premium, you can purchase coverage of $300,000 or more. Homeowners with swimming pools and those who have large numbers of visitors normally elect to pay for higher coverage.

The liability portion of your homeowner’s policy won’t automatically pay those who sue you. To receive compensation the injured person must prove you were negligent. If he can’t prove you were negligent, your insurance company won’t pay.

Example: Lawsuit for Serious Injuries

You invited your neighbor Nancy to your house for dinner. While walking down the stairs, she fell when the stairway banister broke loose. Nancy suffered a serious back injury and filed a lawsuit, alleging you were negligent by having a faulty banister. Her lawsuit asked for $150,000 to cover her medical bills, out-of-pocket expenses, lost wages, and her pain and suffering.

Fortunately, you have $100,000 in liability coverage on your homeowner’s policy. Unfortunately, the jury came in with a verdict against you for $110,000. While your homeowner’s coverage will pay Nancy the policy limit of $100,000, you’re forced to pick up the tab for the additional $10,000.

2) Medical payments

The medical payment, or Medpay, portion of your homeowner’s policy will cover injuries to non-family members regardless of negligence. Medpay is a form of no-fault homeowners insurance. Those injured don’t have to prove you were negligent. If they’re injured, they can simply file a claim against your homeowner’s policy.

After investigating to make sure the injury is legitimate, your homeowner’s insurance will usually pay up to $1,000 for medical expenses. You normally won’t have to pay a deductible. Medpay won’t cover the injured person’s lost wages or pain and suffering.

Example: Minor Injury Covered with MedPay

Let’s say another neighbor Sid was at dinner. While climbing down the infamous staircase, Sid fell, breaking his wrist. Sid decided not to sue you. He just wanted to file a homeowner’s insurance claim to cover his medical bills of $900. In this case, the Medpay portion of your homeowner’s policy paid Sid’s medical bills. It doesn’t matter whether you were negligent or not.

3) Structural and personal property

In addition to liability and Medpay, most homeowner’s policies cover damage to the structure of your home and personal property inside the home. The amount of your coverage will depend on your chosen policy limits. Unlike liability or Medpay coverage, which don’t require a deductible, any payment you receive for structural or personal property damage is subject to a deductible.

The amount depends on the deductible and premiums you elect to pay when buying your policy. Personal property coverage normally won’t cover damage to your neighbor’s or other third-party’s personal property. Of course, you can always choose to pay additional coverage for such events.

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