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Does Homeowners Insurance Cover Negligence?

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Insurance is a legal contract that binds the company and the customer under certain conditions. These conditions are mainly to provide financial assistance to the customers by the insurance provider company in terms of any specified losses, damage, theft, illness or death. However, the insurance provider company in return takes a certain amount that is known as the premium. 

Homeowners insurance can also be called home insurance. It is basically a form of insurance that provides a guarantee for compensation by the insurance company in case of any accidental loss or damage to the residence of the customer including his/her assets such as furnishing. 

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What is Negligence?

Negligence is the failure of acting or performing in a certain way that would result in any loss or damage. If those actions were performed correctly, certain insurance company policies may cover damage but it’s taken on a case-by-case methodology. This can be either favorable or not favorable depending upon each case and the response of the company that has provided the insurance.

Types of Negligence

There are different types of negligence that can be seen in order to understand and have a clear picture of what negligence actually is and how small acts of negligence actually cause a big problem or issue to both the insurance company and the insured. However, it depends upon the merit of the cases, which varies from one another, that the insurance company evaluates in order to decide whether to pay for the compensation or not to the insured. 

  1. In case of forgetting to lock the door of the house: allowing easy access to anyone to walk inside and steal.
  2. Another example of negligence is that to forget the cell phone on a subway thus again a failure from the insured rather than damage or loss from unexpected events.
  3. Another example that can be seen is the person not taking medicines but instead using that amount somewhere else thus again this falls under fraud and negligence and the insured will be responsible for any loss in the future.
  4. One more example is not filling the garden holes caused by the insured dog. This can result in anyone falling into it and the insured negligence will be blamed for this particular act.     

Effects of Negligence

It is forbidden for an insurer to take responsibility for the personal acts of the insured if these acts involve gross negligence or bad faith. It only authorizes covering acts that occur by ordinary negligence. An insurance policy that covers bad faith or gross negligence of the insured will be void.

When It Comes to Coverage for Negligence

Though most companies take negligence claims on a case-by-case basis, there is a possibility that some, if not all the damage is covered under a liability policy. This is often known as liability insurance. This is often included in homeowners insurance policies.

What Is Liability Insurance?

It is actually insurance that the insurance company provides to the customers or insured in order to protect the insured against legal claims or lawsuits that result from any injuries or damage to any person or property. The insurance company not only cover the legal cost but also payout any additional cost that the insured would have been responsible to pay if found guilty. 

For instance, the insured is involved in a car accident. After the reports, it is found that the insured is at fault. Thus in liability insurance, the company will be then responsible to cover the legal cost as well as the cost of the damaged car of the person that got hit.

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