Does home insurance liability coverage include my car?

Personal liability coverage protects your assets, including your car, in the event you’re held liable for bodily injury or property damage. However, it excludes coverage for injury or damage involving your car.

Homeowners insurance liability coverage helps pay legal and medical expenses in the event that you are found liable for property damage or bodily injury. However,  home insurance does not cover liability expenses involving your car , so if you accidentally reverse your vehicle into someone’s property or get into a car accident, you won’t be covered. If you’re at fault in an accident, your auto insurance liability coverage will pay for the other person’s damaged property or medical expenses.

Although home insurance won’t cover damage or bodily injury caused by your car, it does provide liability protection for your most prized assets (including your car) in the event you’re hit with an expensive lawsuit. That means if someone is badly injured in your home, files a lawsuit, and it’s determined that you’re liable, home liability insurance could help cover the settlement. If you don’t have enough liability protection to cover the settlement, the injured party could potentially go after your assets, including your home, car, and retirement savings.

Both home and auto insurance policies typically offer up to $500,000 in liability coverage, however that likely won’t be enough if your assets exceed that amount. If that’s the case, you may want to consider umbrella insurance, which provides additional liability protection beyond the limits in your home or auto insurance policies.

KEY TAKEAWAYS

  • Homeowners insurance does not cover damage or injury you cause with your car

  • If you’re found at fault for an accident, auto liability insurance covers the cost of property damage and medical expenses

  • Home insurance liability coverage does protects your assets, including your car, in the event you’re held legally responsible for bodily image or property damage

Is my car covered under homeowners insurance?

Homeowners insurance does not cover damage to your car or damage caused by it — that’s what auto insurance is for.

Homeowners insurance does cover your personal property in the event it’s damaged by a covered peril, but cars, aircrafts, and watercrafts are typically excluded from coverage. If you’re in an at-fault car accident or your vehicle is damaged in a storm, you’d be covered by auto insurance.

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How can home insurance liability coverage protect my car?

As we mentioned earlier, home insurance won’t cover property damage or personal liability directly involving your car, but it does protect your financial assets in the event of a lawsuit, including your car. If a guest is badly injured in your home, takes you to court, and you’re found legally responsible, liability coverage can help provide legal defense as well as pay for the injured party’s medical expenses, lawyer fees, lost wages, and even funeral expenses.

If your liability coverage isn’t enough to cover all the expenses arising from the lawsuit, your car, home, savings, and even future wages could be at risk. That’s why it’s so important that you have enough liability protection to cover the value of all of your assets.

How much home liability insurance do I need?

The amount of home insurance liability coverage you need depends on the total value of all of your assets.

Most insurers offer a maximum of $500,000 in liability coverage, which may not be enough if your net worth exceeds that amount. If the full value of your assets exceeds your home or auto liability coverage limits, consider purchasing a personal umbrella policy.

What is umbrella insurance?

If your combined assets (like your cars plus a primary or secondary home) exceed the standard home and auto liability coverage limit of $500,000, you may want to consider an umbrella policy to increase your liability limits.

Umbrella insurance, also called a personal umbrella policy, increases your liability coverage to protect you from liability claims that exceed the coverage in your home or auto insurance. Umbrella insurance can help prevent you from having to liquidate your home, cars, or other assets to cover medical expenses or property damage for which you’re liable.

Personal umbrella policies are sold in increments of $1 million and typically go up to $5 million. Coverage kicks in after your home or auto liability coverage limits are exhausted. In order to qualify for an umbrella policy, your insurer will likely require you to have a minimum amount of auto and home liability insurance.

Below are common liability coverage requirements for an umbrella policy:

  • $300,000 per person and $300,000 per accident in bodily injury coverage and $100,000 in property damage in auto liability insurance in addition to $300,000 in home liability insurance

or

  • $250,000 per person and $500,000 per accident in bodily injury coverage and $100,000 in property damage in auto liability insurance in addition to $300,000 in home liability insurance

Learn more about personal umbrella insurance here.