Personal Liability Renters Insurance: What You Need to Know
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Liability insurance is the section of a renters policy that covers you if you cause harm to others through an accident or negligence.
Renters liability insurance may pay for legal costs if someone sues you for situations such as accidents within your home or dog bites.
Renters liability insurance isn’t mandated by law, but your landlord may require it in order to sign your lease.
Few people expect to be the target of a lawsuit, but if it ever happens to you, it could cost you dearly. Between damages and legal fees, you could end up owing tens or even hundreds of thousands of dollars. If you would have a hard time paying that much money out of pocket, you might want renters liability insurance.
What is renters liability insurance?
Renters liability insurance is the part of a renters policy that covers you if you cause injuries to other people or damage to their property. (You may see it called “personal liability” in your policy documents.) Here’s how it works:
You’re playing softball in the yard behind your rental house, and your 12-year-old daughter hits a home run right through your neighbor’s kitchen window. If your neighbor sues you and a court finds you at fault, your liability coverage could pay for things like repairing the broken window and treating any injuries, up to your coverage limit. It also might pay your legal fees.
Personal liability coverage is usually one part of a renters insurance policy that also has other types of coverage. These generally include:
Personal property coverage, which pays if your belongings are stolen or damaged in a disaster.
Loss of use coverage, which pays for hotel bills and other costs if you have to move out while your home undergoes covered repairs.
While you usually have to pay a deductible before your personal property coverage comes into effect, there’s generally no deductible on liability claims.
If you’re not interested in a standard renters policy, you may be able to purchase liability coverage on its own. For example, Assurant offers a liability-only policy to tenants living in the company’s partner properties across the U.S. It won’t cover your personal belongings as a renters policy would, but it will cover your liability if you cause a fire or other accident, or your dog bites a guest.
In a 2021 NerdWallet survey, 23% of respondents who currently had renters insurance said they bought it because they wanted personal liability coverage.
Is renters liability insurance required?
Auto insurance may be required by law in most states, but renters insurance isn’t. However, your landlord might require renters insurance — or at least a minimum amount of personal liability insurance — as a condition of your lease. The average cost of renters insurance is about $15 per month, according to NerdWallet's most recent rate analysis.
If you're trying to decide between purchasing personal liability-only insurance and a standard renters insurance policy, consider these differences:
Personal liability insurance
Covers only damage you do to others or their belongings.
Generally covers personal liability plus damage to your own belongings. Also pays expenses of living away from home during covered repairs.
Liability-only insurance for renters can be difficult to find, as standard renters policies are more common.
Widely available from many insurance companies.
What renters liability insurance covers
The key thing to remember about personal liability insurance is that it covers other people and their belongings — not you and yours. For example, if your dog bites someone outside your household, your liability insurance will likely pay for their injuries, as long as your insurer doesn’t exclude that breed. If your dog bites you, though, you’ll have to turn to your own health insurance for coverage.
Did you know that the average dog-related injury claim is about $49,000? That's according to 2021 data from State Farm and the Insurance Information Institute. Learn more about why your dog needs liability insurance.
Here are a few other scenarios that renters liability insurance may cover:
Falls and injuries in your home. Example: A visiting friend trips over an extension cord in your apartment, breaks their wrist and sues you for medical expenses.
Damage that originates in your home and affects others’ property. Example: A grease fire in your kitchen causes damage to the unit next door.
Damage to other people’s property for which you’re responsible. Example: Your child accidentally breaks a priceless vase while at a friend’s house.
Liability related to social events you host. Example: A guest at your house party has too much to drink and gets into an accident on the way home, injuring passengers in another car. (While your guest’s auto liability coverage might also kick in here, in some states the host who supplied the alcohol can be found liable for such an accident.)
» MORE: The best cheap renters insurance
What does personal liability insurance not cover?
Like any other type of insurance, renters liability coverage has limitations. Here are a few scenarios that personal liability insurance won’t cover, and which alternative types of insurance could help instead:
Injuries in common areas. Example: A guest slips and falls on an icy sidewalk outside your apartment building. Your landlord’s liability insurance, not yours, would likely cover their medical expenses because the injury happened in an area that the landlord was responsible for maintaining.
Car accidents. Example: You’re at fault for a wreck that injures two people in another vehicle. Your liability car insurance, not your renters policy, would cover the other parties’ medical bills and repair costs.
Damage to your belongings. Example: A thief breaks into your apartment and steals your laptop, TV and jewelry. This scenario would fall under the personal property coverage in your renters policy, not liability.
Business liability. Example: A client sues you over a problem arising from your home-based business. Renters insurance typically covers only personal liability claims, not those related to a business; you’ll need a commercial policy to handle this type of issue.
Intentional acts. Example: You deliberately throw a rock and break someone else’s window. That’s a crime, not an accident, and your liability insurance almost certainly won’t cover you.
» MORE: How does renters insurance work?
How much renters liability insurance do you need?
Most renters policies offer liability coverage limits ranging from $100,000 to $500,000. If you’re not sure how much to choose, a good guideline is to add up the value of your assets, including your car, bank accounts and retirement savings. By selecting at least enough liability insurance to cover that amount, you’ll reduce the chances of a lawsuit wiping out everything you own.
If you’re expecting your net worth to go up in the near future — for example, if you just landed a better-paying job — you might want to increase your liability limit accordingly. Raising your liability limit from $100,000 to $300,000 costs an extra $12 a year, on average, according to NerdWallet’s rate analysis.
If you need more than the maximum amount of liability coverage from your insurer, consider buying umbrella insurance. This type of insurance offers additional liability coverage above and beyond the coverage on your renters, auto or other policies.
NerdWallet survey methodology
The survey of 1,525 adults age 18 and older was conducted online by Russell Research on behalf of NerdWallet on Dec. 3-7, 2021. Of those respondents, 298 currently had renters insurance policies. The results have been weighted to be nationally representative. Any differences noted between subgroups have been tested at 95% confidence level.
Renters insurance rates methodology
NerdWallet averaged rates for 30-year-old tenants from multiple insurance companies in every ZIP code across all 50 states and Washington, D.C. We also averaged rates by city. Sample tenants were nonsmokers with good credit living in a two-bedroom apartment. They had a $500 deductible and the following coverage limits:
$30,000 in personal property coverage.
$100,000 in liability coverage.
$10,000 in additional living expenses coverage.
$1,000 in medical payments coverage.
For renters with a higher liability coverage limit, we raised the limit to $300,000.
These are sample rates generated through Quadrant Information Services. Your own rates will be different.