Will homeowners insurance cover a civil lawsuit?

How homeowners insurance may cover lawsuits

Your personal liability coverage may help with civil lawsuits, but only if the lawsuit is related to a covered claim. For example, if a guest slips and falls on your icy walkway and sues you, your policy could help cover any damages up to your policy's limit if you're found responsible.

Medical payments coverage may pay small injury claims due to an accident at your home that injures a guest. Medical payments coverage usually ranges from $1,000 to $5,000, and it may cover an injured guest’s medical expenses regardless of who is at fault. However, it doesn't cover legal costs if the guest decides to sue.

Common home accidents that could lead to a lawsuit

Accidents at home are quite common. If a guest sustains an injury in your home, they could file a lawsuit against you. Here are a few examples of accidents that could result in a lawsuit:

• Damage or injuries caused by pets: If your dog bites a guest, your personal liability coverage may pay for medical bills, depending on the insurer and your policy, up to your coverage limit. Some insurers don't cover dog bites and/or exclude certain breeds.
• Guests injured at your home: If someone is injured due to a fall or accident, liability coverage may cover medical bills up to your policy's limit. This also applies if a non-household member is injured in or around your pool or trampoline.
• Unintentional damage or injuries caused by you or a family member: If one of your household members accidentally injures someone or damages someone else's property, homeowners insurance may cover their medical expenses and/or property damage, up to your policy's limit.

Personal liability limits

Your personal liability coverage may protect you, but only up to the limits of liability listed on your policy. Once you've reached your coverage limits, you're responsible for the cost of the remaining damages or injuries. For example, if your personal liability coverage limit is $500,000, and a settlement totals $550,000, you're responsible for covering $50,000 out of pocket. If you have assets exceeding $500,000, consider a separate umbrella policy for additional liability coverage.

Injury or legal claims that may be excluded

Homeowners insurance doesn't cover every situation. Here are a few typical exclusions:

• Intentional injury: Injuries resulting from deliberately pushing someone down the stairs during an argument and injuring them, for example, likely won't be covered by your homeowners policy.
• Intentional property damage: Breaking your neighbor's window during a dispute, for example, likely won't be covered under your homeowners policy.
• Running a business out of your home: If you make and sell baked goods out of your home, for example, and a customer sues after getting food poisoning, your policy typically won't cover their medical costs or your legal fees.

Other exclusions may apply, so read your policy in full to make sure you are aware of all coverage exclusions.

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