Personal liability coverage
Your home insurance policy includes a variety of insurance coverages. One of them is most likely personal liability coverage, which protects you against accidents that occur to others in your home or apartment. Personal liability insurance is usually well worth it whether you rent or own.
What is personal liability insurance?
Personal liability coverage, also known as "coverage E," is included in the majority of homeowners, condo, and renters insurance policies. Personal liability insurance protects you financially if you are found to be at fault or negligent for injuries to others or damage to others' property that occurs on your property.
If you throw a party and a guest trips on your rug and breaks an arm, your liability coverage would kick in if you were found to be at fault for the guest's injuries. From your personal liability coverage, the guest may be compensated for medical bills, lost wages, or pain and suffering.
Personal liability insurance is typically purchased in dollar amounts ranging from $100,000 to $500,000. On occasion, you may be able to increase the coverage limits on your homeowners policy. However, suppose you believe you require more coverage and your insurance provider does not provide higher limits. In that case, you can inquire with your insurance company about purchasing an umbrella policy to supplement your liability coverage.
What does personal liability insurance cover?
Personal liability may apply to the following incidents:
- On your property, a visitor sustains an injury.
- Your dog bites a visitor or bystander (some companies exclude liability coverage for certain dog breeds).
- Damage to a guest’s property occurs on your premises.
- Injuries or fatalities occur on your property as a result of the use of a pool or trampoline (some companies place restrictions on coverage for these items).
- Someone slips and falls on your icy sidewalk or driveway.
It is important to note that in order for liability coverage to respond to injuries or damage, you must typically be found negligent. Assume a tree on your property falls during a windstorm and destroys your neighbor's garage. In that case, your liability insurance will most likely only cover their losses if you are found to be at fault. In other words, you would have to demonstrate that you were aware that the tree was dead or dying and could cause damage to your neighbor's property. Otherwise, the cost of the repairs would be covered by your neighbor's insurance.
Liability coverage is usually not limited to the location of your home. If you are walking your dog and it becomes agitated, knocking someone to the ground and injuring them, your liability coverage may still cover you even if you were not at home.
How much coverage do you need?
Personal liability coverage ranges from $100,000 to $500,000 on most standard homeowners policies. It may seem difficult to imagine exceeding your homeowner's insurance liability limit, but costs can quickly escalate if someone is injured. Your liability insurance protects you in other ways as well. If your child, for example, accidentally burns down someone else's house, you could be held liable for a sizable sum in property damage and personal injury claims. In this case, a lawsuit could wipe out your entire net worth, including your savings, home equity, and assets.
Consider your future earnings, whether you own multiple residences, and whether you have teenagers, who may be more vulnerable to damages, when determining the appropriate amount of personal liability coverage. Depending on the assets you want to protect, it may be worthwhile to consider purchasing excess liability or umbrella insurance.
When in doubt, contact your insurance agent to review the provisions of your homeowners or renters policy. Examine the fine print in any quote to ensure you are getting the personal liability coverage you require.
How much does personal liability insurance cost?
In the United States, the average cost of a homeowners insurance policy is $1,312 per year for a policy with a dwelling value of $250,000. The amount and percentage of your policy's personal liability coverage are determined by your coverage limits and where you live. For example, a policy with $500,000 in liability coverage will typically cost more than a policy with $100,000 in liability coverage.
Who needs personal liability coverage?
If you are responsible for your own living expenses or have assets such as a home, savings, or investments, you should consider purchasing personal liability insurance to protect yourself financially. Add your net worth and the value of your assets to help you determine coverage amounts. Personal liability coverage limits on homeowners insurance typically range from $100,000 to $500,000. Consider increasing your personal liability coverage or purchasing an umbrella policy if you have a high net worth and more assets.
Benefits of personal liability insurance
If you are sued for property damage or personal injury at home or away from home, your personal injury coverage may assist you in paying for legal counsel, litigation costs, or settlement costs. In the event of a lawsuit, if you do not have personal liability coverage or have a low coverage limit, your out-of-pocket expenses could quickly add up. Your savings, home, vehicles and other assets could be at risk if you do not have adequate coverage to compensate the injured or damaged party.
If you are at fault for an accident, property damage, or personal injury, having personal liability insurance coverage can help limit your out-of-pocket expenses. It could be a critical component of your financial strategy.
How to get personal liability insurance
Check your personal liability coverages and limits if you have homeowners or renters insurance. Contact your insurance agent as your net worth or the value of your home and belongings increases to ensure that you have adequate coverage in place. If you do not have a homeowners policy, you may be able to purchase a stand-alone personal liability policy.
Frequently asked questions
What is personal liability?
Personal liability insurance protects you financially if you or a family member causes bodily harm or property damage to another person. Many types of insurance policies include personal liability coverage, so check with your insurance provider.
Do I need personal liability insurance?
If you have assets that you want to protect, the cost of personal liability insurance is usually well worth it. If someone is injured in your home, your dog bites a visitor, or you cause an accident, personal liability insurance will most likely cover the cost of medical bills, damaged items, legal fees, and court judgments. If you do not have personal liability insurance, you may be forced to sell your home or other assets to cover the costs.
How much is personal liability insurance?
Personal liability insurance costs are determined by a variety of factors. Where you live, the amount of coverage you require, and your claim history are all important factors in determining how much personal liability insurance costs. It may be a good idea to shop around and carefully compare insurance quotes to find the policy that provides you with the coverage you require at the lowest possible cost.
Methodology
StrongInsurance analyses 2021 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. using Quadrant Information Services. Rates are based on 40-year-old male and female homeowners with no claims, good credit, and the following coverage limits:
- Dwelling Coverage A: $250,000
- Coverage B, Other Structures: $25,000
- Coverage C, Personal Property: $125,000
- Coverage D, Loss of Use: $50,000
- Coverage E, Liability: $300,000
- Coverage F, Medical Payments: $1,000
In addition, the homeowners have a $1,000 deductible as well as a separate wind and hail deductible (if required).
These are sample rates and should only be used for comparison. Your quotes will be unique.