What is Homeowners liability insurance?


Homeowners insurance policies consist of two sections: Section I provides insurance protection against damage, destruction or theft to the insured's dwelling, personal property and any structures on the premises of the insured's lodgings.

Section II provides two liability insurance coverages which are exclusively designed to protect the home owner against legal liability to others caused by the insured's negligence.

How Homeowners Liability Insurance Works

Homeowners liability insurance is more commonly known as Section II coverage. It consists of two liability coverages:

  • Coverage E: Personal Liability Insurance provides liability protection to the insured in the event that a third party files a claim for sustaining bodily injuries or property damage as a result of the insured home owner's negligence. Under this provision, the insurer agrees to defend the insured, regardless of the nature of the claim, and pay on behalf of the insured any damages that may be awarded to the injured party, up to the policy limits. One important prerequisite for this coverage to be applied is that the insured is indeed legally liable for causing loss. Because defense costs are usually very high, many insurance companies manage to settle claims out of court. Coverage E liability insurance limits can be set by the insured home owner but they cannot be less than $100,000 per occurrence.
  • Coverage F: Medical Payments to Others of Homeowners insurance promises to pay the medical expenses (within reasonable limits) of other people who happen to have been injured on the insured's premises, by the insured's activities or by a pet owned by them. The difference between Coverage E and Coverage F is that the latter can be applied regardless of negligence or liability, i.e. Coverage F of home insurance pays the medical expenses for any accident that occurs on the insured home owner's premises or that is caused by the insured's involuntary acts.
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