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Liability Insurance FAQ
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Private Liability Insurance

Private liability insurance provides coverage to individuals who wish to be protected from being sued for a variety of reasons. These policies vary between different companies, but each one has several specific provisions. There is a common misconception that only wealthy people need to purchase these, as they are targeted by "sue-happy" people. However, this isn't true. Everyone should have one of these policies, because people in today's society are happy to sue anyone they can.

When this happens, it is important to be protected. Personal liability coverage protects policyholders from lawsuits against negligent acts. For example, if a policyholder decides to use a pressure-washer to spray-paint their house with and the paint blows onto the neighbors' home, the policy would cover the cost of a new paint job for the neighbors.

Private Liability Insurance - What You Need to Know

Most policies also cover acts by children. Depending on the individual company and the underwriter's rules, there may be limits as to what acts by children are covered. In addition to this, children may also result in a higher premium amount, depending on the company. If a child stole the neighbor's car, wrecked it and totaled the vehicle, the policy would likely cover that, also.

Private liability insurance policies vary greatly in price. Some companies that sell other types of insurance may be willing to combine policies to give customers a lower amount. There are also companies that allow customized private liability policies. This gives the policyholder a chance to specifically choose what types of coverage are necessary and which ones are not.

Private Liability Insurance - Compensation

Most claims are compensated by awarding a specific dollar amount per incident of for a specific incident. For example, the policy may cover up to $500,000 in accidental damage to a home and $1 million in medical expenses to an injured party. When choosing amounts, be sure to know the difference between the incident and aggregate amounts. Incident amounts indicate the maximum compensation for one incident, while aggregate amounts indicate the amount allowed for the policy's life or cycle.

When purchasing a private liability insurance policy, consumers should always consider the important risk factors they have. Children, pets, dangerous hobbies and the proximity of neighbors' homes should all be taken into consideration. This form of insurance should not be confused with high-risk personal liability insurance. Keep in mind that hunting, keeping wild animals as pets, horseback riding injures and extreme sports are not covered in a private liability policy.