ConsumerInfo on Home Insurance

Liability Insurance In Your Homeowners' Policy: Why You Need It

By Helen Anderson, Chair of Insurance Committee, Consumers' Association of Canada Ontario '95

Why do we have liability insurance in our tenants' or homeowners' insurance policy? What liability can a house incur when it can't move off the lot?

The liability portion covers not only your premises, but also the legal liability arising out of your personal actions which cause harm to others.

Take, for example, a skiing accident. You careen down the slope, crash into someone and seriously injure them. Certainly, their medical needs are looked after through our medicare system. But did you know that medicare has the right to attempt to recover its costs from you personally? Also, the injured person may sue you for lost income, and pain and suffering. If you are sued, your insurance company will defend you and pay any awards made against you, up to the limits of the policy, usually $1,000,000.

Your dog might bite a child, causing serious damage to her face. Or your son could pitch a baseball through your neighbor's picture window. Don't panic. Consult your insurance company or broker.

If you have a swimming pool on your property, liability insurance is a must in case someone, somehow, drowns in your pool or dives in without checking, breaks his neck, and becomes paralyzed for life.

Your liability insurance in your homeowners' policy covers you whether you are negligent or not, anywhere in the world!