There are so many unforeseen accidents that can happen in and around your home. Liability protects you against lawsuits for bodily injury or property damage that you or family members cause to someone else. It also pays for damage caused by your pets. So, if your child or man's not-so best friend accidentally breaks something in your neighbor's yard, you are covered. The liability portion of your policy also pays for both the cost of defending you in court and any court awards—up to the limit of your policy.
Liability limits generally start at about $100,000. Many recommend that you have up to $300,000 in coverage. Some people feel more comfortable with more coverage. You can also purchase an umbrella or excess liability policy which provides broader coverage, including claims against you for libel and slander, as well as higher liability limits.
Your policy also provides no-fault medical coverage. If a friend or neighbor breaks an ankle playing basketball in your back yard, he or she can simply submit medical bills to your insurance company. Expenses are paid without a liability claim being filed against you. You can generally get $1,000 to $5,000 worth of this coverage.