Home Insurance Medical Payments Explained

Home insurance policies provide extensive valuable insurance coverage for individuals who rent or own their own homes. In the insurance industry, home insurance is referred to as a ‘package’ policy.

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explaining medical payments - life insuranceA package policy is one that includes both hazard insurance and liability insurance. These are separated as follows:

  • Hazard Insurance – applies to physical damage or loss to your property as required by the policy conditions. Property is defined as both building and contents as the interests of the policyholder apply.
  • Liability Insurance – applies to injuries to people on your property – or caused by household members (including pets) whether or not the household member is on the premises of the property. This coverage explicitly does not apply to automobiles.

Medical payments coverage is afforded under the standard home policy with limits set from $500 to $5,000 per incident.

Medical payments do not exactly fit under the criteria of liability coverage and are a particularly valuable item in the home insurance contract.

What is covered under the home insurance policy?

Here is a brief recap of the hazard insurance coverage under the home insurance policy:

  • Dwelling coverage – If there is an insurable interest meaning that you must own the building.
  • Other structures – Again, this applies only if you own the main building.
  • Personal property – Damage to, or loss of household contents, and other personal belongings owned, used, or worn by you and your family.
  • Additional living expense – This coverage pays for the necessary living expenses up to the limit of the coverage, to continue as nearly as possible the normal standard of living when the residential premises cannot be occupied because of a covered peril.

Perils Ordinarily Covered Under Hazard Insurance

  • Fire, smoke, lightning, explosion
  • Wind, hail, vehicular damage (not your car), or civil unrest
  • Theft, vandalism
  • Trees and other falling objects
  • Weight of ice, snow, and sleet
  • Freezing, rupturing, or sudden overflow of a plumbing, heating, or air-conditioning system — or a household appliance

Be aware that flood insurance and earthquake insurance are not included in the home insurance policy. For flood insurance, contact FloodSmart.gov. If you need earthquake insurance, consult your local agent.

Comprehensive Personal Liability

vacant house insuranceThis insurance covers the owner or renter against legal claims that arise from accidents to others upon owned or rented property.

This liability coverage, too, follows you where you go. It does not, though, provide liability for automobile or boating accidents.

This particular type of coverage is less expensive than many types of liability coverage. Plan to purchase enough coverage to protect you and your family in the event of a lawsuit.

The portability of this coverage to other aspects of your life is of value to you.

Coverage may be from $100,000 to $500,000 with little difference in premium.

Note, however, that you are covered only for negligence rather than for intentional injuries and damage.

You cannot proceed to shoot at your neighbor’s fence, damaging it and have your insurance company respond, paying for the damage and possible injuries.

On the other hand, your Schnauzer may bite someone entering the yard, damaging his or her leg. In that case, usually the injury would be covered by your medical insurance.

The portability of this type of insurance can lead individuals to assume that business liability could be given in addition to personal liability.

No business liability is provided under the home insurance policy.

Medical Expense

This covers medical expenses, but is limited to an amount per person and per accident for injuries that occur on your premises or elsewhere to persons other than you or your family. You, a member of your family, or your pets, may cause injuries when they are off-premises.

The difference between medical expense coverage and comprehensive personal liability is that medical expense payments may be made regardless of legal liability. You do not have to go through a legal process for this coverage to be provided.

An example of this type of claim would be if your child accidentally hit another child in a baseball game, damaging the other child’s mouth. Medical payments can respond to help with this type of medical emergency.

As an insured, you must go through the process of notifying the insurance company of the claim, make a statement about the circumstances, and cooperate with the adjustor in settling the claim. Failure to comply with the terms of the policy can invalidate the subsequent coverage if there should be a lawsuit.

Purchasing Home Insurance That Works

Before purchasing home insurance, you should carefully examine the different companies that sell home insurance and their capabilities as well as the prices they charge.

Often purchasers settle for the lowest price for insurance rather than examining the qualifications of insurance companies.

Begin With Your State Insurance Department

Since insurance is a State issue rather than a Federal one, each state has its own insurance department. You can find the one for your state by going to the National Association of Insurance Commissioners (NAIC) website and clicking on your state.

The link will take you to your state’s website where you can find information upon the licensing of insurance companies within the state as well as complaint ratios against the insurance companies.

There is a wealth of information available in your state’s insurance website that is useful to examine, including a great deal of consumer information to help you with various types of insurance.

Other Sources For Assessing Insurance Companies

best home insurance companiesA number of other sources are available to allow you to examine home insurance options as well as the financial status and complaint ratios for insurance companies.

Compare Insurance Ratings, Prices, and Coverage

The best way to purchase insurance is to compare the ratings of the insurance companies as well as the prices charged, and coverage afforded. Carefully read the information you collect and the completed policy once you have purchased it.

Know your rights and responsibilities under the insurance policy and be careful to follow these. If you have questions, be sure that you ask your agent.

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