How to Insure Guests on a Homeowners Insurance Policy

Having friends over for a cookout or letting out-of-town relatives bunk in your spare bedroom while they are on vacation is one of the joys of home ownership. But don't let an injury-causing accident force you to end your career as the hostess with the mostest. Having the proper insurance coverage can go a long way to preserving your reputation and retaining your friends if the worst happens.

Instructions

Difficulty: Moderate

1. Carry liability insurance in the maximum amount you can afford. It covers you if a visitor is hurt while staying in your home. Consider an umbrella policy that can provide up to $1 million additional protection.
2. Calculate your net worth starting with your salary. Add any additional household income from either a spouse or a second job. Next add the equity in your home, the value of any investments and your personal property. Subtract any outstanding debts to determine the final value. If your net worth exceeds the traditional $300,000 liability coverage limit of most homeowners policies, consider buying an umbrella policy to cover the difference.
3. Check to see if your policy includes good will coverage designed to pay the medical bills of visitors hurt while on your property no matter who is at fault. This includes a clumsy neighbor injured while helping you take down your screens and the delivery person who falls on your icy sidewalk.
4. Make sure your homeowners policy covers dog bites. Dog bites are more common than you think with nearly five-million people in the United States bitten each year. If you own a breed that insurers consider more dangerous, you'll probably pay more for coverage than someone who owns a more docile breed.
5. Check your coverage before hiring someone to work in your home for an extended period of time. Professional caterers, for instance, carry liability insurance, but that coverage is meant to protect their workers, not the person who hires them. Some firms will arrange to include you as an additional insured if requested. If you do, ask to see the certificate of insurance as proof, and take the extra step of calling the insurer.

Tips & Warnings

• As the old saying goes, friends don't let friends drive drunk, so take reasonable, preventive measures whenever you serve alcohol. If you don't, you may be liable for not only their injuries, but also any damage they may cause if they are in an auto accident on the way home.
• Pool owners have additional concerns when it comes to liability insurance. If you are thinking of installing a pool, make sure your plans comply with municipal building codes and regulations. Install a fence with a locking gate to keep out curious children and have safety equipment nearby in case someone gets into trouble.
• If someone not related to you lives in your house, his property won't be covered under a standard homeowners policy unless he is specifically listed in the policy.