When home insurance includes liability cover, many questions often arise. This article reviews some of the most common doubts about this cover, including what it is, what it covers and who is protected.
What Liability Cover in Home Insurance Means
This cover in a home insurance policy is similar to what is known in car insurance as third-party insurance. It covers damage that the home itself, or the people living in it, may cause to third parties.
For example, if the home has a water leak and this causes damp patches in a neighbour’s property, the home insurance will use this cover to deal with the damage. It also covers personal injury that may occur. For example, if someone is at the home and suffers cuts from broken glass, the insurance may respond.
Thanks to this cover, the people living in the property can have peace of mind against possible indemnities or repairs for damage caused to third parties.
Who Is Covered by This Guarantee?
The owner of the property is usually the policyholder. Therefore, they are the main person covered by the insurance in these cases. In addition, the policy usually also protects the people who live with them. In other words, all cohabitants of the insured home are usually covered, although there may be differences between insurers, for example regarding the age of cohabitants; this should be checked in the general conditions.
An example: a child lives in a home protected by this cover and, while playing, causes a flowerpot to fall from the balcony. It falls onto a person or a car. Although it was not the child’s mother, who is the policyholder, who caused the accident, it may be covered because liability cover also protects cohabitants under her responsibility.
Different Areas of Cover: Examples
Liability cover can apply in several areas, including the following.
Private Life Situations
Everyday situations, provided they are not work-related. For example, if a dog in the household bites a neighbour, or if a child breaks someone else’s window while playing.
Damage Caused by the Home to Third Parties
Damage caused by the property to other people or things. For example, when a step causes someone to trip and break a leg, or when a broken pipe causes damp in a neighbour’s home.
Damage Caused by Cohabitants to Third Parties
Damage caused by cohabitants to third parties is also covered. If a guest suffers food poisoning, or if the policyholder is riding a bicycle and crashes into a parked vehicle, there may be cover. However, as this is third-party insurance, damage to the bicycle itself would not be covered.
Differences Between Being an Owner or a Tenant
When a home is insured with liability cover and the policyholder lives in the property, damage caused by the property and by the policyholder may be covered.
For example: the owner accidentally starts a kitchen fire that damages the building structure. The liability cover in the home policy covers the indemnity payable to the homeowners’ association because the policyholder lives in the property. However, if the insured home is occupied by a tenant, the situation changes. If the tenant caused the fire, it may be the tenant’s liability policy that covers the damage caused to third parties. This is why it is always important in home policies to state whether the person taking out the policy is the owner, tenant, etc.
In conclusion, liability is a very important cover in a home insurance policy, and it is essential to remember its uses so it can be applied when needed.
If you need an insurance brokerage specialising in liability insurance, we are at your disposal.