What Does a Home Insurance Policy Cover?

You pay car insurance, health insurance, and you may have purchased a life insurance policy. You feel a little tapped-out, but you also want to consider your homeowner's insurance options. While homeowner's insurance policies typically cover damage from fire, certain natural disasters, or damage caused by others, it also prevents lawsuits due to the various liabilities that homeowners assume. For example, a homeowner's insurance policy would provide coverage costs associated with a lawsuit if your new neighbor slipped and fell on your icy driveway, breaking their leg. In many ways, a home insurance policy is there when the unlikely happens, coverage is dependent on your particular situation. In any event, it helps to know what a home insurance policy covers before you decide.

Liability Coverage

Homeowner's insurance policies cover legal liability in the event that anyone suffers an injury while on the insured property. Certain actions of the policyholder which occur away from the insured property may also be covered. Even if a house is under construction and has no contents to be protected, the homeowner should obtain liability insurance to protect against claims of workers, and even trespassers.

When a homeowner purchases liability insurance, part of the insurance company's obligation is to provide a defense in the event of a lawsuit. Even though the insurance company selects the lawyer and must approve the payment of all legal fees and other expenses of the lawsuit, the lawyer represents the policyholder.

Under most types of liability insurance policies, the insurance company has the contractual right to settle or defend the case as it sees fit. The homeowner has an opportunity to express opinion, but the company typically has no obligation to obtain the policyholder's consent or approval.

Suits Against Homeowners: What is Covered?

A suit against a homeowner may involve several different claims, some of which may be covered by the liability insurance policy, and others which may not be covered. The insurance company is obligated to provide a defense for any claim, which could be covered, but the company may not be obligated to pay the damages for certain types of claims. Since liability policies typically do not provide coverage for intentional acts, there may be a question as to whether the policyholder acted intentionally.

Negligent or accidental claims are generally covered. However, a complaint filed in court may allege both negligence and intentional actions, a wrongful act done for a wrongful purpose. In this situation, the insurance company may send the homeowner a Reservation of Rights letter, a notice that the company is paying for the defense for the claim, but is not agreeing that it is required to pay for any and all losses under the terms of the policy.

Get a Free Legal Evaluation of Your Home Insurance Concerns

While you may not need every single bell and whistle available in a home insurance policy, not having adequate insurance can come back and bite you. Essentially, you'll want just enough to protect you and your family, while providing peace of mind so you can enjoy your home. If you have additional questions about home insurance coverage or a pressing legal need, get started today with a free legal evaluation of your concerns.