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Dear Insurance Adviser,

If a $1,000 claim is made under the medical payments coverage of a home insurance policy for a visitor/guest and an accusation of negligence or fault is made, how could that affect the premium at renewal time? Or, if no such injury claim is filed by the homeowner himself but the visitor/guest sues for medical payments under $1,000, how would that affect premiums?

— Sameer

Dear Sameer,

Filing a homeowners claim for guests’ medical payments coverage will not increase your rates, whether or not you were at fault.

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Homeowners medical payments coverage is intended to be strictly “good neighbor” coverage. The only requirement is that the injured party must be a guest, not a resident. And injury claims under this particular benefit must be submitted by the homeowner, not the guest.

If your guest is injured by you, your pets or your premises as a result of negligence and sues you, the lawsuit would be defended under the liability coverage in your home insurance. If your guest wins the lawsuit and a judgment is made against you, the insurance company will pay on your behalf whatever the judgment or settlement is, up to your liability limit.

Off-the-shelf policies include $100,000 of liability coverage. I recommend that you increase that to at least $500,000 or more. The added cost for an additional $400,000 of coverage is only about $25 a year. Additional liability coverage for any policy is the best buy in the insurance business.

Unlike your homeowners guest medical payments coverage, the liability coverage in your policy applies worldwide outside your home, covering all personal or athletic pursuits. If you, for example, injure someone with a racquetball racket at the club, that injury would be defended under home insurance liability coverage.

Good luck, Sameer. I hope this helps.

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