If you have a homeowner’s insurance policy with liability coverage, it likely extends to accidents that you cause on property owned by someone else. It also probably covers accidents caused by members of your household on the property of others. This is because the victim could file a lawsuit against you, which could result in losing equity in your home if they prevail or receive a settlement. Homeowner’s insurance does not cover car accidents, since consumers are expected to purchase auto insurance for that situation.
Not every type of injury-causing incident is covered. The policy will cover only true “accidents” resulting from carelessness, rather than intentional wrongdoing. If someone in your household commits a crime on someone else’s property, such as vandalism or burglary, insurance will not provide coverage. It also will not pay out damages if you assault someone at a bar or sexually harass someone at your job, for example, since these types of behavior involve intent.
On the other hand, a policy will cover acts of negligence. In legal terms, this means that the policyholder or someone in their household failed to exercise reasonable care under the circumstances. This failure to use reasonable care must have led directly to injuries to someone else. Reasonable care is defined as what an ordinary, prudent person would have done in the same situation. Negligence can consist of doing something that a prudent person would not do or failing to do something that a prudent person would do. This might involve being distracted by your cell phone and knocking over someone else on the sidewalk, or it might involve spilling coffee on someone at a dinner party hosted by a friend. These are careless actions that pose risks, but they are unintentional.
The policy will pay damages to the victim only if your family member or you were actually at fault for the victim’s injuries. However, this question will be investigated and litigated by the insurer, so you will not need to worry about the legal nuances.
Getting Your Insurance Company Involved
As soon as you find out that someone is suing you based on injuries that you allegedly caused, you should alert your insurance company. You may be warned in advance that you will be sued, or you may not know until you receive the official summons and complaint. The insurer will determine whether the policy covers the lawsuit. If it finds that the injuries resulted from intentional misconduct or otherwise fall outside your coverage, you should discuss your situation with an attorney. You will need to respond to the complaint within a fixed, short time window or face the risk of a default judgment against you.
If your insurer does take the case, you probably will find the process less stressful and time-consuming. Attorneys for the insurer will handle the procedural and strategic elements of the process. The insurer will cover litigation costs and any damages that are awarded to the accident victim through a settlement or jury verdict. However, you will need to cooperate with the insurer in making your defense. This may include answering questions under oath at a deposition, providing written materials during the discovery process, and appearing at trial if a settlement is not reached.