Will Homeowners Insurance Cover a Civil Lawsuit?


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Updated: August 7, 2024

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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.

Key Takeaways

Home insurance policies generally cover civil lawsuits related to incidents on your property through liability coverage.

Homeowners insurance will usually cover legal costs, medical payments and settlements related to incidents on your property.

Your home insurance typically won't cover civil lawsuits due to intentional acts or business-related activities.

What Home Insurance Covers in Civil Lawsuits

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:

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    Legal Defense Costs

    Your home insurance company will provide legal representation and cover attorney fees, court costs and other legal expenses if you are sued for bodily injury or property damage caused by you, your family members or your pets.

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    Liability Coverage

    If you are found legally responsible for causing injury to someone or damage to their property, your policy will cover the damages awarded up to the liability limit of your policy. This can include medical bills, repair costs and compensation for pain and suffering.

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    Medical Payments

    Home insurance policies include coverage for medical payments to others, which can help pay for medical expenses if someone is injured on your property, regardless of fault. This can sometimes help prevent a lawsuit by covering immediate medical costs.

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    Settlement Costs

    If the insurance company decides to settle the lawsuit out of court, they will negotiate and pay the settlement amount up to the policy limits.

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    Personal Injury Protection

    Homeowners insurance also offers additional personal injury protection, which can cover lawsuits related to non-physical injuries like libel, slander or defamation.

Does Home Insurance Cover All Injury or Legal Claims?

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:

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    Intentional Acts

    Any lawsuit arising from intentional actions by the homeowner is not covered. Insurance policies financially protect against accidents, not deliberate harm.

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    Business Activities

    Legal claims related to business activities conducted on the property are typically excluded from coverage. If a client sues after an injury during a home-based business meeting, homeowners insurance won't cover it.

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    High-Risk Activities

    Lawsuits from high-risk activities, such as hosting large parties or owning certain types of pets, may be excluded. Policies often have specific exclusions for activities deemed excessively risky.

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    Neglect and Poor Maintenance

    Claims resulting from neglect or failure to maintain the property properly are usually not covered. For instance, if someone sues after being injured due to a broken step that was never fixed, the insurance may not pay for the claim.

Civil Lawsuits' Impact on Home Insurance Premiums

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.

What Happens if a Lawsuit Exceeds Policy Limits?

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.

FAQ About Home Insurance and Civil Lawsuits

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

Are legal fees covered by homeowners insurance in a lawsuit?
What types of incidents are covered by homeowners insurance?
Does homeowners insurance cover intentional acts?
Will your insurance premiums increase if you are sued?
Can you get additional home insurance coverage for lawsuits?

About Mark Fitzpatrick


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Mark Fitzpatrick is a Licensed Property and Casualty Insurance Producer and MoneyGeek's Head of Insurance. He has analyzed the insurance market for over five years, conducting original research and creating personalized content for every kind of buyer. He has been quoted in several insurance-related publications, including CNBC, NBC News and Mashable.

Fitzpatrick earned a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his knowledge of economics and insurance to bring transparency around financial topics and help others feel confident in their money moves.