Homeowners insurance provides coverage for incidents causing damage to the insured's home. Such policies are frequently purchased because mortgage companies and other lending institutions require the coverage to protect their financial interest in properties. These policies also protect insureds against claims brought by others asserting they were injured because of homeowner negligence. Homeowners will pay higher premiums when seeking higher liability limits and protection against wider variety of claims.
Legal Costs and Fees
A homeowners insurance policy will generally pay to settle a claim against an insured, provided that the claim is covered by the policy and the homeowner's negligence actually caused the damages. In addition to settlement costs, the insurer will pay for legal costs to defend the insured against the claim. For example, if an insured person is sued because her dog bit a visitor to her property, the homeowner's insurance company would typically hire an attorney to provide a defense.
Frequently Covered Claims
Most homeowners insurance policies provide coverage for certain types of claims. Dog bite claims are frequently covered. So are claims for libel and slander. Claims for personal injury are also frequently covered. So if a visitor trips on a homeowner's sidewalk and then sues the homeowner for negligence, the insured's homeowners policy would generally cover the claim and provide a defense.
Other types of claims are generally excluded from coverage. If an insured is sued because of an incident not covered by the homeowners' policy, the insurer will typically advise the insured that no coverage exists. Homeowners policies usually do not cover intentional acts. For example, if a homeowner shoots someone on his property, most homeowners policies will not provide coverage if the intruder sues the homeowner for his injuries. Some policies may include a self-defense provision, but many will not. Claims of sexual harassment, molestation and assault are also typically excluded from coverage.
Disputes with Insurer
Sometimes the insured and the insurer disagree about whether a claim should be covered. Policy provisions can be detailed and confusing, especially when they are applied to a specific fact pattern. In most jurisdictions, an insurer's duty to defend an insured is broader than its duty to indemnify. If a lawsuit's allegations against a homeowner could possibly trigger coverage, insurers are generally bound to defend the insured, at least until a court rules that the policy does not cover the claim. Some states allow insureds to file bad-faith lawsuits against insurers that have wrongfully refused to pay for legal costs and fees in such situations.
- Bankrate.com: Surprising Things your Home Insurance Covers
- Farmers Insurance Group: Home Insurance FAQs
- Milwaukee Wisconsin Journal Sentinel: Insurance may not Cover Legal Costs of Self Defense Shootings
- Business Insurance: Duties to Defend, Indemnity not Always Linked
- Pillsbury & Levinson LLP: San Francisco Homeowners Insurance Claim Denial Lawyers
E.S. Martin is an attorney who has worked in civil litigation for more than eight years. He focuses his work in insurance, personal injury, subrogation and risk management.