Do You Understand Your Liability Coverage?

Understanding Liability

I have a friend who I wrote an insurance policy to cover her mobile home that she recently moved in to. Times are tough, she lost her home to a short sale, so moved to the mobile to try and get her feet back on the ground after years of trying to make a house payment on a property that was worth less than she paid.

Because the mobile home needed some work, she received the help of a friend who helped her fix the flooring, strictly on a volunteer basis. While cutting a 2 x 4, he cut his hand, had to go to the hospital and have surgery. Luckily, he will be fine.

When the insured called, I confidently told her that her policy includes $50,000 in liability coverage, so she won’t be sued and have to declare bankruptcy. I told her to call the insurance company to file a claim.

To my surprise, the company, (who I won’t name), rejected the claim, determining that she didn’t cause the accident. It is similar to if a person drives their car into your house. They wouldn’t be covered under your insurance either.

Two lessons: Read and understand your policy, as boring as it may be, and discuss any questions with your agent. Secondly, don’t have a friend help you out unless they have insurance, and are aware of the liability issue.

Please call Menath Insurance at 775-831-3132, or visit www.menathinsurance.com if you ever have questions on your insurance policy.