The basis for the need of liability insurance is the idea that it is the property/homeowner’s responsibility to provide safe conditions for anyone who may come onto the property. This even includes the process of building a home. So before you actually live in a home you may be building, or even before you have contents placed inside it, or even before there is even much of structure erected, you will need liability insurance.

Something that many homeowners do not know is that you are liable even when people may be on your property uninvited. That’s right, you are responsible even for trespassers. Homeowners are responsible to provide reasonable care to prevent injuries for anyone who comes onto their property. The intent for that person’s presence on your property is irrelevant.

Two types of liability insurance are necessary, personal and medical. Personal liability covers the homeowner in case there is an accident, you are sued and found to be liable. That accident could result in injury to an individual or property damage. This insurance is designed to cover the homeowner’s legal costs, if such is necessary.

The second type of liability insurance is medical. This insurance pays for medical treatments resulting from someone being hurt or injured in an accident while in your home or on your property. These expenses would include x-rays, doctor’s visits, medicines, hospital stays, and so forth.

Liability coverage in a typical homeowner’s insurance policy has set limits as to the amount of coverage provided. Medical costs, depending on the kind of injury incurred, could easily exceed those set limits. In order to address this scenario, some insurance companies offer “umbrella” liability insurance. This insurance is designed to provide coverage for any liability that exceeds the limits set within individual policies (homeowners, auto, etc.). Here’s the good part – umbrella coverage is surprisingly affordable.

It should be remembered, the amount of liability coverage needed is not determined by the total value of one’s assets. In other words, the determination of a dollar amount for you which you may be judged liable does not stop at the total value of your assets. You may well be responsible for amounts exceeding that amount. This could mean not only the loss of your assets, but also future wage garnishment.