Do I need to get homeowners insurance liability coverage?

Besides protecting your home and its contents, did you know that your home insurance policy may also offer another type of cover called legal liability home insurance? This is an important but generally less well known inclusion to home insurance policies that’s worth investigating.

This insurance cover safeguards you and your family members from any legal liability if someone – your friend, your neighbour, or a visitor – gets hurt on your property. This cover may also protect you if you or a family member injures someone else outside your home unintentionally. Additionally, with legal liability home insurance, you and your family members may be protected against being liable for loss or damage to someone else’s property as well.

Typical liability claims include injuries due to slips and falls in your home or elsewhere on your property. If a tree or a branch from your property falls and causes damage to your neighbour’s garage, home or parked car, the policy may cover you for this too.

Another frequent home insurance public liability claim is dog bites. If your dog bites someone and you’re proven liable, the vet and medical bills should be taken care of. If your dog were to get into and damage someone else’s property, this insurance should cover that also.

Some legal liability home insurance policies cover you not just for accidents that take place at your property, but also for ones which happen anywhere in Australia. Some even cover you if the incident happens in New Zealand elsewhere in the world, as long as you reside in Australia. For example, you could be away on holiday and playing tennis when a shot accidentally breaks your opponent’s nose, and your insurer may still cover you for any costs.

Some insurers might also offer you optional cover for domestic workers compensation. This takes care of accidents that might occur while you have people working for you on your property. This cover, however, is only available in some states. Of course, many tradespeople and subcontractors often have their own liability insurance – whether self-bought or through their employer. It may still be a good idea to consider this cover if your home is being renovated or repaired.

These policies typically automatically include every member of your family that resides in the property being covered.

Your home and contents insurance will take care of most of your legal liabilities, and your level of liability coverage is generally more than enough. Most policies in Australia usually include a considerable legal liability cover, often in the range of $10 million to $20 million. This amount is dependent on your insurer and your policy, so check the Product Disclosure Statement (PDS). This cover protects you against any financial expenses that arise from any illness, injury or death suffered on your property by somebody who doesn’t live there. It also covers any loss of or damage to their property.

While a home insurance policy that includes legal liability is typically quite comprehensive, there are still a few situations where legal liability may not cover you, such as:

• Damage to your own property
• Injury or property damage to any people who reside with you
• Liability while under a rental or lease agreement
• Claims that are from your business or trade

Each insurance company has a different view on inclusions and exclusions, and those depend on the policy. Always read the PDS of your chosen policy to ensure that you are fully aware of precisely what is covered.