Will Homeowners Insurance Cover a Civil Lawsuit?

Homeowners insurance typically covers civil lawsuits that arise from incidents on your property. The liability coverage component of your policy will handle legal defense costs and any damages awarded up to the policy limit. For instance, if your dog accidentally bites a guest or a family member slips and sustains an injury, homeowners insurance will cover the legal and medical costs involved if they decide to sue.

Understanding the extent of liability coverage allows you to adjust your limits accordingly to ensure full financial protection against a home insurance lawsuit.

Homeowners insurance typically covers civil lawsuits arising from incidents on your property. The liability coverage  component of your policy, which all home insurance policies should include, covers these types of lawsuits.

If someone gets injured at your home or faces property damage and decides to sue, your homeowners insurance will usually cover the following:

Homeowners insurance does not cover all injury or legal claims, such as those resulting from intentional acts or business activities conducted on the property. This type of insurance is primarily designed to cover sudden and accidental damage. For example, injuries from high-risk activities or neglect and poor maintenance are typically not covered.

To ensure you have adequate financial protection, take a look at the rundown of liability scenarios that usually aren’t covered by homeowners insurance:

Civil lawsuits can affect your home insurance premiums by causing them to increase. Insurance companies view lawsuits as indicators of higher risk, which may lead them to adjust your rates accordingly. If you have a history of claims or lawsuits, insurers might see you as more likely to file future claims. As a result, they often raise premiums to offset the perceived risk or potentially cancel your home insurance policy altogether.

If a lawsuit exceeds your policy limits, you are personally responsible for the remaining costs. This means that once your insurance pays up to the policy's maximum, you must cover any additional expenses out of your own pocket. This can include legal fees, medical bills and damages awarded to the plaintiff. To financially protect yourself, consider purchasing an umbrella policy, which provides additional liability coverage beyond your standard homeowners insurance.

Here are some answers to frequently asked questions about civil lawsuits to help you navigate this important aspect of your homeowners insurance.