Your home is probably your single largest asset, so having sufficient homeowner's insurance coverage to protect your investment makes sense. Standard homeowner's policies don't just cover the structure of your home, they also include a personal liability element that covers the medical expenses of someone who gets injured on your property. But there is a catch. The medical payments portion of your policy only covers people outside of your family.
You might think of homeowner's insurance as applying to your home. It does, but it also does a whole lot more. If you or a household family member accidentally injures another person or causes damage to their property, the liability portion of your homeowner's policy kicks in to defend you in court and to pay any damages that are awarded. The medical payments portion of your policy typically has a no-fault provision that pays the bills for immediate medical treatment. This coverage applies whether the injury took place on your property or anywhere else in the world.
The medical payments portion of your homeowner's policy covers everything from a friend slipping on your front porch and breaking a tooth, to your dog biting the neighbor's kid. All you have to do is submit the medical bills to your insurance company. The bills get paid and you avoid getting sued.
Neither the liability or medical payments portion of your homeowner's insurance policy applies to you or to members of your family who reside with you in your home. Your policy will cover family members who are no longer members of your household, such as a grown child who maintains her own home. It might also cover household employees who live at your home. You'll need to check the exact provisions of your policy to be sure.
Your homeowner's insurance policy only covers accidental injuries that occur on your property or that are caused by you or a family member. You won't be covered if you intentionally injure another person. It won't cover injuries caused by a motor vehicle. Your auto liability policy should cover those situations. Your homeowner's policy also won't cover an injury that occurs as a result of transacting business in your home, even if the injury is accidental.
- 360 Financial Literacy: Liability Insurance under Your Homeowners Policy
- Insurance Information Institute: What Is Homeowners Insurance?
- Insurance Information Institute: What Coverage Is Included In A Standard Homeowners Insurance Policy?
- New Jersey Department of Banking and Insurance: What is Medical Payments coverage?
Mike Parker is a full-time writer, publisher and independent businessman. His background includes a career as an investments broker with such NYSE member firms as Edward Jones & Company, AG Edwards & Sons and Dean Witter. He helped launch DiscoverCard as one of the company's first merchant sales reps.