My 11-year-old daughter was, with other children, involved in the accidental fire that destroyed a trailer containing construction material on the lot next door. My insurance company says even though my coverage of liability has a given limit, that only $1,000 coverage is available due to the exclusions and that this is the maximum any company's policy would cover — even if I had an umbrella policy. Is this the maximum coverage one can expect under damage to another's property or is there better coverage from other companies?

Terry, Tennessee

Dear Terry,

George Rosenthal, the Insurance Information Institute's consumer expert, says he has never heard of a $1,000 limit on damage in an incident like this. "Under the typical homeowners policy, the insured, and family, are covered for any incidents off the property," explains Rosenthal. "And if you're sued because of what your daughter did, your insurance company is obligated to defend you and pay the damages, up to the liability limit."

He suggests calling your insurance company and asking them to send you a copy of your policy with the portion (highlighted in yellow) that says you're covered only for $1,000.

Back to the Forum

Disclaimer: We are journalists, not financial planners or insurance brokers. Nothing we say should be interpreted as a recommendation to buy or sell any insurance product, or to provide other financial or legal advice.