How Homeowners Insurance Pays Out In A Personal Injury Lawsuit


If you’re injured in an accident that is someone else’s fault, how will you pay for your medical bills? Say, for example, you’re enjoying a party at a neighbor’s house but you slip and fall in the driveway on your way out because the neighbor didn’t clear all the ice away. You’re immediately rushed to the hospital in an ambulance where you’re treated for broken bones and spend the night in observation. Later, you receive a bill in the mail for thousands of dollars you can’t afford. What are your options? Well, the person whose property on which your injury occurred may be liable, and their homeowners insurance policy can likely pay out.

What is personal liability?

When you’re injured at the fault of someone else, it’s unfair for you to find yourself buried under crushing debt as a result of costly hospital bills and other expensive treatment. Most homeowners insurance policies include a feature called personal liability coverage that is designed to protect homeowners at fault in a scenario such as this. Personal liability typically includes coverage of $100,000 or more for medical bills, court fees and settlements. If you’re injured on another homeowner’s property, and that person is liable, file a lawsuit in order to start the process of getting the coverage you deserve.

What happens once the lawsuit is filed?

Once a claim is filed with the insurance company, an adjuster will contact your lawyer and an independent investigation of the claim will be performed in order to determine fault. The location of the scene of the accident will be investigated and police reports and medical reports will likely be pulled. You’ll need to supply medical bills, prescription bills, hospital bills and any other proof of expenses resulting from your injury in order to determine the total damages owed.

If the insured homeowner is clearly found at fault, the insurance company should work hard to settle your claim as quickly and as smoothly as possible. However, if you or anyone other than the insured are found to have been partly at fault, the insurance company may dispute the claim and withhold your settlement. Another example of when an insurer may withhold settlement is when it cannot be proven that your injuries are as serious as you claim. For this reason, it’s extremely important to hold onto all documentation you receive throughout the treatment process and report your injuries as accurately as possible when you file your case.

Depending on how long the investigation takes and how long negotiations last, your personal injury case could take anywhere from a couple of weeks to several years to reach a settlement. Make sure you’re up for that kind of commitment before you file suit. However, once your lawyer and the insurance company reach an agreement, it typically only takes a couple of weeks to receive your check.

What kind of pay out can I expect?

If the claim is settled in your favor, your attorney will have the final say in negotiations. Before you get your check, however, you’ll first need to sign a release, officially settling your claim. Next, you and your lawyer can pay any outstanding medical bills and cover any remaining fees resulting from your injury. Finally, your lawyer will deduct his attorney fees and any other expenses incurred throughout the duration of your case. Once these deductions have been made, you’ll receive the balance of the settlement in a check to cover your pain, suffering and loss of income. The size of this remaining pay out depends entirely on the specifics of your case and the skill of your lawyer.

If the person you are suing has adequate personal liability coverage it can make the process go even smoother.

This article was contributed by Carrie Van Brunt-Wiley, Editor of the HomeInsurance.com blog. Carrie has been writing insurance news and consumer information for HomeInsurance.com since 2008. She graduated from the University of North Carolina in Wilmington in 2005 with a B.A. in Professional Writing and Journalism.