Slip-and-fall accident may be covered by homeowner's insurance

Most homeowner's insurance policies pay when someone gets hurt while visiting your home, but there are limits on the coverage.

Q. My sister slipped and fell at a neighbor's house and fractured her hip. She doesn't want to sue the neighbor, but her medical bills are mounting and she can't work, which is also threatening her ability to make her mortgage payments. Rather than suing, could she file a claim with the neighbor's homeowner's insurance company?

A. Yes. A typical homeowner's policy provides financial protection if a visitor gets hurt on the policyholder's property, though the amount may be limited.

A common policy offers two separate types of accident-related protection: liability coverage and medical-payment coverage. So-called med-pay coverage pays for some of the injured person's hospital and rehabilitation bills, usually up to a limit of $5,000 or $10,000. The injured person submits the bills to the homeowner's adjuster as they come due, and the insurer pays the charges until the policy's limits are reached.

It's important to note that med-pay coverage kicks in regardless of whether the homeowner is found to have been negligent.

Conversely, liability coverage pays only if the accident was caused by the property owner's negligence. Common examples include a frayed or worn carpet that can trip up an unwary visitor, wet or freshly waxed floors that can cause a slip and the absence of sturdy handrails on stairs.

Your letter doesn't say what caused your sister's slip-and-fall, so I can't say with certainty whether she'll be able to collect on the homeowner's liability coverage. If she files a claim, the neighbor's insurance adjuster will interview both her and the property owner to get each side of the story and then determine whether a payout is warranted.

Should a claim be filed but not settled, your sister still could file a lawsuit against the property owner or may qualify for less-expensive binding arbitration.

I wish her good luck and a speedy recovery.

Real estate trivia: Though the typical homeowner's policy provides $100,000 in liability coverage, many owners pay extra for much higher limits, primarily because jury awards in successful lawsuits have soared.

Q. What are the best home-related purchases to make in August?

A. It's hard to believe, but many retailers already are starting their summer clearance sales. That means big discounts on everything from barbecue grills and accessories, to patio furniture and lawn mowers.

Look for even bigger price cuts in coming weeks as stores clear floor space for autumn and even holiday-themed goods.

In a similar vein, Labor Day is renowned for its deep discounts on mattresses, appliances and indoor furniture. Last year, many retailers cut prices on such items by 50 percent or more.

Though the holiday doesn't arrive until Sept. 4, many stores already have signaled their intent to start their big sales a week or so earlier, according to the experts at bargain-hunting website NerdWallet.com.

You can add to your savings this month if you live in one of the 15 or so states that offer sales-tax-free "holidays" in August. Some last more than a week, allowing you to purchase certain items without paying a state sales tax.

Though many states limit the tax exemption to back-to-school items such as clothing and notebooks, others are more generous. A few extend the break to laptop computers, software programs and energy-saving appliances.

Call your local congressional representative to find out if your state has a sales-tax-free event this month, or visit the website operated by the nonprofit Federation of Tax Administrators (www.taxadmin.org).

Q. My son and daughter-in-law are expecting their first child, and they have asked us to loan them $15,000 for a down payment so they can get a mortgage to buy their first home. My husband and I are fortunate enough to be able to loan them the money or even just give it to them, but we are a bit worried. If we give them or loan them the money for the down payment, can the bank foreclose on our own home if the kids can't make the mortgage payments on theirs?

A. No. Parents who provide down payment help to their grown children without also cosigning a loan agreement with a bank or pledging their own house as collateral generally cannot be forced to make the payments on the grown child's home if the loan goes into default.

Instead, parental financial obligation begins and ends with the amount of money that they contribute to the down payment of their offspring's home. The bank can't force the parents to make the payments if the kids default on their mortgage, provided the parents did not cosign for the debt to repay.

• For the booklet "Straight Talk About Living Trusts," send $4 and a self-addressed, stamped envelope to David Myers/Trust, P.O. Box 4405, Culver City, CA 90231-4405. Net proceeds are donated to the American Red Cross.

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