Liability & Medical

A Guide to Section 2 of Your Insurance Policy

Foreword:

Section II of a Homeowners Insurance policy covers Personal Liability and Medical Payments to Others. This section provides protection if someone is injured on your property or if you accidentally cause damage to someone else's property. Here’s an outline of when each coverage applies, along with some examples:

1. Personal Liability Coverage

  • What It Covers: Personal Liability coverage provides financial protection if you or a household member are found legally responsible for causing bodily injury or property damage to others.

  • When It’s Used: It’s used when you’re sued or legally obligated to pay for damages due to an accident or unintentional act.

  • What It Pays For: This coverage can pay for legal defense costs, settlements, and judgments, up to your Policy Limits.

  • Basically, this bucket helps cover:

    • Legal fees

    • Court costs

    • Settlements or judgments

    It typically does not cover injuries or damage to the homeowner, their family, or their Personal Property.

Examples:

  • Injury to a Guest: If a guest trips on a loose step on your front porch and breaks an ankle, they may sue you for medical expenses and other damages. Personal Liability coverage can cover your legal defense and any potential Settlement.

  • Accidental Property Damage: If your child accidentally throws a ball through a neighbor’s window, breaking it, your Personal Liability coverage could pay for the cost of the repairs.

2. Medical Payment Coverage

  • What It Covers: This coverage helps pay for minor medical expenses if someone is injured on your property, regardless of who is at fault. It’s designed to prevent small injuries from escalating into larger liability claims.

  • When It’s Used: It’s used in scenarios where a visitor has a minor injury and needs prompt medical attention.

  • What It Pays For: This coverage pays for reasonable and necessary medical expenses, like first aid, X-rays, and hospital visits, up to the policy limits. It typically covers expenses up to a smaller limit than liability coverage.

  • Basically, this bucket will pay for reasonable medical expenses, including:

    • Hospital bills

    • X-rays

    • Surgery

    • Doctor visits

    It generally covers smaller incidents and prevents potential lawsuits, but it does not apply to injuries sustained by the homeowner or their family.

Examples:

  • Child Injury While Playing

    A neighbor's child trips and falls while playing in your yard, resulting in a cut that requires stitches. Medical Payments to Others would help cover the child's medical expenses without needing to determine liability.

  • Dog Bite Incident: If your dog accidentally nips a friend who’s visiting, causing a minor injury, Medical Payments coverage could help cover their medical treatment costs.

Key Differences

  • Personal Liability handles claims where legal action or significant financial damages are involved, especially in cases of Negligence.

  • Medical Payments to Others is often used for minor injuries where medical costs are low, avoiding the need for a liability Claim or lawsuit.

Section II coverage helps protect you from financial responsibility and legal repercussions if someone is injured or if you accidentally damage someone else’s property, making it an essential part of your homeowners insurance policy. This Guidebook unpacks different expenses covered by these policy buckets, as well as provides advice on hiring a lawyer and associated legal terminology.