Negligence

Negligence is insurance lingo for describing reckless or unreasonable actions that result in damages or losses because of you, someone covered on your policy, or someone else.

What is negligence?

Negligence is the legal way of saying you, anyone covered on your policy, or someone else screwed up.

Specifically in insurance, negligence refers to the failure to act in a way that a reasonable person would when faced with the same situation. And as a result, someone or something was damaged.

This can apply to both you as the policyholder, others covered under your insurance policy (e.g. named insured and additional insured), or a third party.

Depending on how negligent you were and what sort of insurance is involved, you may be partly covered for the consequences of your mistake. But if you did something like leaving your house door wide open and someone walked in and took your TV, your insurance probably wouldn’t cover the full costs of your error.

TL;DR negligence is something that your insurer won’t always cover and will deal with on a case-by-case basis – to prevent this, always ask yourself if you’ve done everything reasonably possible to protect your stuff and those around you.

Gross negligence and your coverage

As we mentioned above, your insurer takes into account how negligent you were when you file a claim. Meaning, levels of negligence will be used to determine your liability (how on the hook you are) in a given incident.

While negligence can mean simply forgetting to lock your bike or forgetting your phone on the train, gross negligence is the most severe type of reckless behavior. It means there was willful or deliberate disregard on your part for your own or someone else’s safety or things (and vice versa).

Example 1:

Say you have a dog with a history of biting (not covered by most insurance companies, btw), and you let her off the leash and she bites your neighbor. That’s most likely be considered gross negligence, and is not covered under the personal liability in your policy.

Example 2:

Let’s imagine you knew there was a gas leak from somewhere in your yard near your neighbor’s place, and it ignites, causing severe damage to their property. In this case, you’d also be on the hook and most likely won’t be covered by your insurance.

Other examples of negligence in insurance

Here are a few not-so-crazy examples of lack of action on your part, which could qualify you for negligence:

  • Not covering up the holes your dog digs in your yard, which caused a visitor to fall in and break his/her leg
  • Failing to shovel snow from your sidewalk and driveway, which caused a neighbor to slip and fall
  • Not calling professionals to take down a rotten tree leaning over your neighbor’s fence, which fell in a windstorm and caused a ton of damage

Check your policy to understand your liability limit, and specifically, how your insurance provider defines negligence.

Please Note: These definitions don’t alter the terms, conditions, exclusions, or limitations of policies issued by Lemonade. They are intended for educational purposes only - they’re not meant to be used in lieu of professional legal or financial advice. We’ll do our best to keep them updated, but they may not always reflect current industry developments. Feel free to use the terms with attribution (friends don’t let friends plagiarize!)
Property and casualty insurance provided by Lemonade Insurance Company, 5 Crosby St., 3rd floor, New York, NY 10013. Life Insurance provided by North American Company for Life and Health Insurance®, Administrative Office, One Sammons Plaza, Sioux Falls, SD 57193.
Lemonade Insurance Agency, LLC (LIA) is acting as the agent of Lemonade Insurance Company and Lemonade Life Insurance Agency, LLC (LLIA) is acting as the agent of North American Company for Life and Health Insurance®. Both LIA and LLIA receive compensation based on the premiums for the insurance policies each sells. Further information is available upon request.
LLIA is a sub-producer of Bestow Agency, LLC. Life insurance quotes are provided by Bestow Agency, LLC dba Bestow Insurance Services in CA, who is the licensed agent. Term Life insurance policies are issued on North American Company for Life and Health Insurance® policy form LS181 and LS182, or state version including all applicable endorsements and riders. Products or issue ages may not be available in all jurisdictions. Limitations or restrictions may apply. Not available in New York. Our application asks about your lifestyle and health; your answers allow us to save you time and avoid offline medical exams.