Another person alleged that you are responsible for their property damage. What will your homeowners insurer do?

When someone alleges that you are responsible for their property damage, your homeowners insurance typically provides a liability coverage that includes both defense and indemnity. This means that the insurer has the duty to defend you against claims made against you, regardless of whether the allegations are true or false.

The correct choice reflects that the insurer has the discretion to either pay the claim or defend you based on its assessment of the situation. This flexibility is important because it allows the insurer to evaluate the merits of the claim and take appropriate action, which may involve defending you in court if there is a reasonable chance that you are not liable for the damages.

Some insurance policies may outline specific conditions under which they will choose to defend or settle a claim, but generally, the insurer’s responsibility is to ensure that you have legal representation if you are being sued, which is a critical aspect of protecting your rights in such situations.