Personal Liability Coverage for Homeowners
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Personal liability insurance covers you if you’re responsible for someone else’s injury or property damage.
Personal liability coverage is a standard part of a homeowners insurance policy.
It can cover scenarios such as a dog bite or someone getting injured on your property.
You probably know your homeowners insurance policy will pay for damage to your home — but did you know that it can also help defend you from lawsuits? That’s because most homeowners policies offer personal liability insurance in addition to property coverage. Here’s how it works.
What is personal liability insurance?
Personal liability insurance covers you if you're responsible for injuring someone or damaging their property. If the claim turns into a lawsuit, your policy can pay your legal fees and other expenses a court finds you responsible for, up to your coverage limit.
Here’s a scenario in which you might need this coverage:
Your deck gets slippery during a summer pool party, and a guest trips and falls. She breaks her elbow and sues you for medical expenses, plus pain and suffering. Your personal liability insurance would cover your legal defense and pay up to your policy limit if a court finds you liable for the injury.
Personal liability coverage is a standard part of a homeowners insurance policy, just like coverage for the structure of your house. Personal liability coverage also comes with other types of home insurance policies, including renters and condo insurance. (Learn more about renters liability insurance.)
The personal liability insurance on your homeowners policy generally covers everyone in your household, including children and pets.
Another part of your homeowners policy, medical payments coverage, can also help if someone gets hurt on your property. It's a "no-fault" coverage with relatively low limits, which means it can pay for minor incidents for which you weren't necessarily responsible. But for bigger claims or lawsuits, your personal liability insurance would pay.
Is personal liability insurance required for homeowners?
There’s typically no law saying you need to buy personal liability insurance in order to own a house. However, if you have a mortgage, you’ll almost certainly end up with personal liability coverage.
Most mortgage lenders require hazard insurance, which is the part of a homeowners policy that covers the structure of your home. When you buy homeowners insurance to get hazard coverage, you’ll likely get personal liability coverage, too.
If you've paid off your home or you’re buying one without a mortgage, you could choose not to get homeowners insurance. But going without financial protection from lawsuits or the destruction of your home is a risk you’d want to weigh carefully.
What does personal liability insurance cover?
Personal liability insurance covers harm you do to other people or their belongings, not your own injuries or damage to your stuff. Below are a few scenarios that your personal liability insurance would probably cover.
Injuries you cause
You round a corner while jogging and accidentally crash into a pedestrian, knocking him off the sidewalk. He breaks his ankle and has to miss work for a couple of months. He sues you for medical expenses and lost wages.
Injuries on your property
A delivery person slips and falls on your icy front steps. She files a lawsuit, accusing you of negligence because you failed to put down salt that morning.
Injuries caused by your pet or child
Your dog Fluffy gets a little over-excited at the park and bites a child’s hand, leaving a wound that needs stitches. The child’s parents file a claim against your homeowners policy to recover their medical costs. (Note: Some insurers won’t cover certain dog breeds or animals with a history of aggression. Check with your insurance company to make sure it will cover your dog.)
Damage caused by someone in your household
Your son hits a long fly ball through a window at his best friend’s house. It shatters not only the glass but also an expensive vase sitting inside. Your liability insurance could pay for the damage.
Damage on your property that affects other people’s homes
A tree in your yard falls onto your next-door neighbor’s roof. Because the tree was dying and you hadn’t gotten around to having it professionally removed, you're at fault for the damage.
What does personal liability insurance not cover?
Below are some scenarios that personal liability insurance generally won't cover, along with advice on which other insurance policies might. For a full list of exclusions, check your homeowners policy.
You run a red light and crash into an SUV. All three passengers in the other vehicle are hurt, and the SUV is totaled. Your liability car insurance would handle medical and repair costs for the people in the other vehicle.
You run a business out of your home, and one of your clients sues you for giving bad advice. Although the incident may have happened in your home, personal liability insurance usually won’t cover lawsuits connected to business pursuits. Instead, you’ll need business insurance.
Injuries to people within your household
Your daughter, who lives with you, trips and falls down the basement stairs. If she were a guest in your home, personal liability insurance might cover her injuries — but because she’s a member of the household, she’ll have to rely on her own health insurance for treatment.
Your teenage son and his friends spray-paint rude messages all over the outside of a local store. Because they caused this damage on purpose, it’s a crime, not an accident or act of negligence. Your liability insurance is unlikely to cover your son’s defense.
How much personal liability coverage do you need?
Homeowners insurance policies usually offer liability limits between $100,000 and $500,000. In case that’s not enough, companies that target wealthier consumers, like Chubb, sell amounts well into the millions.
The amount of personal liability insurance you choose depends on the value of your assets, your chance of being sued and your tolerance for risk.
Consider buying at least enough personal liability insurance to cover all your assets, including your home, savings and investments. You might want to choose a higher amount if any of these statements apply to you:
You have hobbies that could potentially injure others, such as skiing, hunting or surfing.
You have a swimming pool, trampoline or other “attractive nuisance” on your property.
You own a dog. (Make sure your insurer will cover the breed.)
You’re a public figure or a wealthy member of the community.
You often host parties in your home.
Can’t get enough liability coverage with your homeowners policy? Consider buying umbrella insurance. This type of policy gives you extra liability coverage on top of your existing homeowners and auto policies. Limits typically start at $1 million.
How much does personal liability insurance cost?
You’ll likely buy personal liability insurance as part of a homeowners policy. The average cost of homeowners insurance in the U.S. is $1,820 per year, according to NerdWallet’s rate analysis. That rate reflects a $300,000 liability limit, but it doesn't cost much to add more coverage. Increasing the liability limit to $500,000 adds $8 to your average annual cost, our analysis found.
NerdWallet averaged rates for 40-year-old homeowners from various insurance companies in every ZIP code across the U.S. All rates are rounded to the nearest $5.
Sample homeowners were nonsmokers with good credit living in a single-family, two-story home built in 1984. They had a $1,000 deductible and the following coverage limits:
$300,000 in dwelling coverage.
$30,000 in other structures coverage.
$150,000 in personal property coverage.
$60,000 in loss of use coverage.
$300,000 in liability coverage.
$1,000 in medical payments coverage.
We made minor changes to the sample policy in cases where rates for the above coverage limits or deductibles weren’t available.
These are sample rates generated through Quadrant Information Services. Your own rates will be different.