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Insurance · Homeowners Policies

What does the liability coverage (Coverage E) in a homeowners policy generally protect against?

Reviewed by Jordan Morley, Editorial Lead at 247SimpleTests. Written by the 247SimpleTests Editorial Team from the official source material cited on every question.

Correct answer

Claims for bodily injury or property damage to others for which the insured is legally responsible, such as a guest injured on the property

  1. A Damage to the insured's own home
  2. B Claims for bodily injury or property damage to others for which the insured is legally responsible, such as a guest injured on the property
  3. C The insured's medical bills only
  4. D Only flood damage

Why this is the answer

Coverage E (Personal Liability) in a standard homeowners policy protects the insured against claims and lawsuits for bodily injury or property damage to others for which the insured is found legally responsible — for example, a visitor who slips and is injured on the property, or damage the insured accidentally causes to someone else's property. It typically pays both the damages (up to the policy limit) and the legal defense costs. This is distinct from the property coverages (A–D) that cover the insured's own dwelling and belongings. A related coverage, Medical Payments (Coverage F), pays smaller medical bills for guests regardless of fault. Understanding homeowners liability coverage is core content.
Source: NAIC Model Outline, Homeowners Liability

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About this topic: Homeowners Policies

Homeowners questions cover the HO forms (HO-2 through HO-8), the coverage sections (dwelling, other structures, personal property, loss of use, liability, medical payments), the perils, exclusions and endorsements. This is one of 21 Property Insurance questions on homeowners policies, each with a full explanation on a single study page.

New to this exam? Our Insurance exam guide explains the format, scoring, and how to prepare.

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