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Insurance · General

What does the liability portion of a homeowners policy (Coverage E) cover?

Correct answer

Personal liability for bodily injury or property damage caused by the insured or household members, worldwide except auto

  1. A Only property damage to the insured's home
  2. B Personal liability for bodily injury or property damage caused by the insured or household members, worldwide except auto
  3. C Auto accidents involving the insured's vehicle
  4. D Only incidents occurring on the insured's property

Why this is the answer

Coverage E (Personal Liability) in HO policies covers the insured and household members for BI or PD caused to others — and coverage is worldwide (not limited to the property). Key exclusions: auto accidents (covered by auto policy); intentional acts; business activities (need separate business policy); professional liability. The worldwide nature is significant — if you accidentally injure someone while on vacation, your homeowners liability still applies.
Source: P&C Exam, Homeowners Coverage E

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