Understanding Your Homeowners Insurance Policy: Liability Coverage
Under Section II of a standard homeowners policy, your insurance company will cover your liability to third-persons for certain bodily injury or property damage claims. Simply put, if someone sues or threatens to sue you, your insurance company may reimburse you for damages you paid to the third-party claimant or the cost of defending the lawsuit. This blog takes an in-depth look into the personal liability section of your homeowners policy.
The Insuring Clause
Section II of a typical homeowners policy contains a provision whereby your insurance company agrees to defend and indemnify you for damages you become liable to pay a third-party for certain “bodily injury” or “property damage” that results from an “occurrence.”
Standard homeowners policies have specific definitions for “bodily injury,” “property damage,” and “occurrence.” Policies typically define “bodily injury” to mean physical harms to a person’s body, while “property damage” is defined as physical damage to tangible property. An “occurrence” is typically defined as an “accident.” Thus, any bodily injury or property damage the insured intentionally causes is not covered.
The Duty to Defend
An insurer agrees to defend the policyholder against injury and property damage claims a third-party files against them. This means that the insurer will pay for an attorney to defend their insured against such third-party claims. If an insurance company fails to defend the policyholder, it breaches its duty to defend. An insurer’s breach of their duty to defend the policyholder constitutes “bad faith.”
Medical Payments Coverage
Under Section II – Liability coverage, the insurance company agrees to pay the insured for a third-party’s necessary medical expenses which arise from bodily injury caused by an occurrence. Such medical expenses are covered if incurred within 3 years after the date of the occurrence causing the associated bodily injury.
Medical Payments Coverage includes:
- Medical expenses
- Surgical costs
- X-ray costs
- Dental expenses
- Ambulance costs
- Hospital costs
- Nursing expenses
- Prosthetic devices
- Funeral expenses
Exclusions to Section II – Liability Coverage
A standard homeowners policy lists specific liabilities that it will not cover. Thus, if a claim or lawsuit falls under one of the following exclusions, the insurance company does not have a duty to defend the insured.
Intentional Acts. Standard homeowners policies exclude from coverage any bodily injury or property damage that results from the insured’s intentional acts. Even if a policyholder did not intend to harm the third-party claimant, the exclusion precludes coverage for acts the insured intentionally performs where harm to the claimant was reasonably foreseeable.
Business Acts. A typical homeowners policy will exclude losses that arise in connection with the insured’s business activities. Policies commonly define “business” to mean the insured’s trade or profession.
Rental Activities. Basic homeowners policies will exclude coverage for bodily injury or property damage that arise from the insured’s act of renting part of their dwelling to the claimant. The extent of this exclusion can differ from policy to policy, depending on whether an endorsement applies.
Premises Not Insured. Because a homeowners policy covers the insured’s liability for injuries or property damage to third-persons in connection to the property it agreed to insure, any injury that is not connected to an insured location. An “insured location” typically involves the residence premises, and any structures or grounds connected to the residence premises.
Use of a Motor Vehicle. Automobile insurance covers losses that arise from a person’s use or operation of a motor vehicle. As a result, homeowners policies do not cover the same losses that an automobile insurance policy covers.
Expert Legal Advice from Experienced Miami Insurance Claim Attorneys
Insurance policies can be challenging to decipher. Without an experienced Miami insurance claim attorney to advise you and represent your interests, it can be difficult to understand the extent of your rights and obligations under the policy. When you do not understand your rights, it can be easy for insurance companies to take advantage of you. At the Morgan Law Group, we’ll use our more than 2 decades of insurance law experience to help make sure insurance companies give your rights and interests the respect they deserve.