Every spring brings prom and graduation party seasons, and these events sometimes become occasions for teens to drink alcohol. Teens at unsupervised parties risk harming themselves and others when they drink, and parents who host parties may be held responsible for injuries or damages that occur there or after guests leave.
Assume a guest drinks several beers at the party, drives off, and gets into an accident that injures himself and a passenger. The parents of both injured teens sue the hosts, who notify their homeowners insurance company.
Homeowners policy exclusions
- The occupancy, operation, or use of a motor vehicle by any person
- The entrustment of a motor vehicle by the insured person to anyone else
- The insured person’s failure to supervise or negligent supervision of any person using a motor vehicle
- The actions of a minor involving a motor vehicle
Because of these exclusions, the homeowners policy will not cover the hosts’ liability or defense costs for the car accident. Their personal auto insurance policy might cover them instead. For more on hosting events and liability, see Holiday Party Liability and Insurance Considerations.
An auto policy’s liability insurance covers the individuals named on the policy and household residents who are their relatives for liability for bodily injury arising out of the use of any auto. Therefore, even though the hosts were not operating the vehicle, their auto policy can cover their liability. The auto policy for the car involved in the accident (the guest’s policy, or more likely his parents’) will also cover the hosts’ liability for the passenger’s injuries, and a host’s auto policy will step in only if the owner’s policy does not apply or is exhausted.
Now assume the guest consumed beer but a sober guest gave him a ride home. Rather than go to bed, the young man swims in his hosts’ pool and drowns. His parents sue the hosts, alleging impaired judgment because the hosts allowed him to drink. Because this accident did not involve a motor vehicle and no homeowners exclusions apply, the homeowners policy should pay for the hosts’ liability and legal defense.
Coverage amounts can differ significantly between policies. Many homeowners policies provide at least $100,000 of personal liability per occurrence and commonly offer $300,000 or $500,000 limits, while minimum auto liability limits required by state law are often much lower. For information on how liquor-related claims are treated, see Understanding Liquor Liability Insurance for Bars and Restaurants.
Because damages in serious injury or fatality cases can exceed typical auto minimums, parents should consider higher liability limits and an umbrella policy, which can cover amounts above homeowners and auto limits. Of course, the best course of action is to supervise parties properly so everyone stays safe.
If you want specific help reviewing your coverages, talk to an agent.
Frequently Asked Questions
Will my homeowners policy cover injuries at a party I host?
Often yes for non‑auto injuries, but homeowners policies usually exclude liability related to motor vehicle use, so coverage depends on the circumstances.
If a guest drives drunk and injures someone, whose auto policy applies?
The auto policy for the vehicle involved is primary; the host’s auto policy may be excess if the owner’s policy is insufficient or inapplicable.
Does homeowners insurance cover a guest who drowns after drinking at my house?
Yes, if the incident did not involve a motor vehicle and no other exclusions apply, a homeowners liability policy generally covers such claims.
Should I buy extra liability coverage for hosting events?
Considering higher liability limits and an umbrella policy is prudent because damages in serious injury or death cases can exceed standard policy limits.