Personal legal insurance covers you when you’re sued or taken to court because of an accident, whether it’s at home or while traveling. With this type of legal insurance, there are two main types of cover: third-party liability and personal injury cover. Let’s look at these personal legal plans and find out exactly what each one means in terms of protecting your personal finances.
Many states legally require you to carry insurance that covers damages to others or injury caused by you. Liability coverage helps protect your personal assets from lawsuits if someone becomes injured on your property and tries to sue you for more than they can afford. If there’s a judgment against you as a result of these claims, your liability coverage will help pay out any settlements or court-ordered damages. This includes medical bills and lost wages related to an accident that occurred on your property.
Homeowner Personal Legal Plans
A homeowners insurance policy can protect you in a variety of ways. Most typically, it pays to repair or replace your home and personal belongings in case of damage from an accident or disaster, such as fire, wind, or theft.
Coverage for Bodily Injury (Such As Medical Bills, Lost Wages, Pain, and Suffering)
When you’re held legally responsible for injuring someone, coverage for bodily injury helps pay for their medical bills, lost wages, and other costs associated with your actions. Likewise, if another party injures you—for example, a slip-and-fall accident at a retail store—bodily injury coverage will help pay your medical bills.
Coverage for Property Damage to Other People’s Houses Or Personal Property
Liability insurance will cover your legal costs in any situation where someone sues you because of bodily injury or property damage caused by your negligence. For example, let’s say that a little boy trips over a toy left on your lawn and breaks his arm. If his parents sue you for damages and win, liability coverage will pay for your defense in court. In addition, if they are successful in their claim against you, liability coverage will pay to replace what was damaged or destroyed.
Additional Living Expenses if You Can’t Live in Your Home Because of the Loss Or Damage
Your policy may cover temporary living expenses if you can’t live in your home because of a covered loss. Depending on your policy, it could pay for reasonable and necessary expenses to stay in a hotel, at a friend or relative’s house, or other temporary accommodations. Some policies provide coverage only for situations that force you to vacate your home immediately because of an unexpected natural event such as a fire.
Special Covers & Exclusions (E.g., Watercraft Liability, Flood)
If your state requires you to carry certain coverages, you may want to investigate whether there are any special coverages available besides those required by law. For example, flood insurance might be a smart add-on if your area is prone to flooding. Add it especially if it comes at a discounted rate or even with incentives like preferred interest rates or waived policy fees. The same could be true for watercraft liability coverage.
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