By Guest Blogger, Kendra Cochran
What happens if your child’s friend falls off the trampoline in your back yard and needs multiple surgeries to recover from the broken bones? Who pays the bills if your dog runs away and causes a car accident while disturbing the traffic on a local road? What happens when your teenager throws a party while you’re away and one child is hospitalized from alcohol poisoning? Who pays for the damages when your horse kicks someone, your dog bites someone, or your live-in mother with dementia forgets to clean up the spilled cooking oil that causes a visitor to slip?
As an insurance agent, I’m often asked how much coverage someone should have to rebuild a home. That answer can be clearly calculated with a reasonable inflation buffer. Sadly, I do not often get asked how much liability protection someone should have in their Homeowner’s Policy. Liability coverage is financial protection against personal lawsuits. A liability claim related to bodily injury can last for years and the cost is unpredictable and unimaginable depending on the attorney and the injury. Having solid liability protection is the most important point I can address when walking someone through a Homeowner’s Policy and assuring that it fits the family’s needs.
However, how much liability protection do you need? Some policies are quoted with the basic $100,000 of liability protection to handle someone else’s bodily injury or damages. If a child is hurt at your home and endures multiple surgeries due to a dog bite or trampoline accident, I virtually guarantee the hospital bills will exceed $100,000. If a teenager ends up with brain damage due to alcohol poisoning, the hospital visits, emotional distress, and overall financial impact will absolutely exceed $100,000. Any expense above and beyond that would come out of your pocket. People often think that medical insurance will foot the bill, but often times that bill gets collected from the party at fault (the homeowner).
Therefore, making sure that your liability protection is large enough to protect all of your assets and your future earnings is the primary goal when setting up your Homeowner’s Policy. Your liability coverage acts as your financial shield between you and the harmed party. Some people choose to increase their liability protection to $500,000 or $1 million. Others choose to cover their risk with a liability umbrella policy that extends over your home and family, autos, and rental units. Talking with your local insurance agent about your specific risks will help you feel confident that your insurance policy does not have loopholes (such as not covering your mom, horse, or breed of dog) and that your coverage is sufficient to avoid financial devastation. Make sure that you’re properly covered.
Kendra Cochran is a local State Farm insurance agent specializing in both insurance and financial services. She works with clients to protect what they have worked for and build the future they hope for. Kendra is a Sonoma County native raising her two kids, horses and dogs in Petaluma. She helps clients throughout California and is always willing to be a resource regarding insurance questions or concerns.