Personal liability insurance

Your home is where your friends, family, and neighbors can gather to share meals or spend time together. But what if someone were to injure themselves on your property? Would you be held liable for their medical bills or other expenses? 

Homeowners liability insurance provides you and your household with financial protection should someone else ever get hurt on your property. This financial coverage can step in to protect you after someone else gets hurt so you aren't left paying their related expenses out of your own pocket.

Read on to learn more about personal liability insurance, what this coverage provides, and how to decide how much home liability insurance coverage you need to protect yourself and your assets adequately.

Key takeaways

• Standard homeowners insurance policies include personal liability as part of their coverage.

• Personal liability homeowners insurance protects homeowners and other household members against liability for injuries or property damage.

• Eligible injuries could include those that occur on the property itself or outside the home if the insured individual is deemed liable.

• A separate liability policy, such as umbrella insurance, may offer supplemental coverage in addition to whatever liability limits are provided by a homeowners insurance policy.

What is personal liability insurance coverage?

Personal liability insurance coverage is the portion of your homeowners insurance policy intended to financially protect you, the policyholder, if someone is injured on your property. 

Injuries can happen anytime: A neighbor could slip and fall on your front steps, your child’s friend could break their arm in your backyard, or your dog could escape the yard and bite another animal. While the first step will be ensuring their safety and recovery, you may also wonder how much all this will cost you… and it’s a smart question to ask. That’s also where liability insurance comes in. Rather than paying someone else's medical bills, legal fees, or other expenses out of pocket following an injury or property damage, your homeowners insurance personal liability protection can cover losses on an eligible claim up to your coverage limits.

Liability claims are not as common as other claims, accounting for only 2.3% of homeowners insurance losses in 2021, according to the Insurance Information Institute (III). However, these liability claims tend to be more costly than property damage claims on average. That same year (2021), the III found that the average property claim resulted in $14,935 in losses while the average liability claim — including bodily injury and medical payments — was $25,323. 

Deciding whether supplemental liability coverage (like an umbrella policy) is necessary depends on which types of homeowners insurance you’re considering, your assets, and any particular hazards you may have (such as a swimming pool, trampoline, or dog) on your property. Most common homeowners policies, like HO-3 insurance, do include a certain level of personal liabilities insurance protection, though you may still want to purchase additional coverage for even greater peace of mind. 

What does personal liability insurance cover?

Homeowners liability insurance will financially cover you and the members of your household against someone else’s eligible medical bills, legal expenses, lost wages, and other related costs. This coverage activates if a person gets injured on your property or if you cause injury or property damage to someone else. You may also be protected if you damage someone else’s property or if someone in your household causes an injury outside the home.   

With this liability insurance, personal injury coverage can extend to anything you’re deemed responsible for, such as someone twisting their ankle on a broken walkway (another reason proper home maintenance is so important) or a light fixture falling on a guest’s head. If the worst happens, you can rest assured that your insurance company will help with eligible expenses so you don’t have to pay them out of your own pocket. 

While personal liability is only one aspect of a comprehensive home insurance plan, it’s an important one. Thankfully, whether you buy additional homeowners liability coverage or stick with the liability limit in your existing homeowners policy, you’ll know you aren’t going against a claim alone. In fact, liability insurance is now standard in most home insurance policies; it’s common to see policy limits set at $100,000 or more for a traditional homeowners insurance policy. 

You may never expect to be sued for things like medical care, lost wages, or death benefits, but just the idea of having to handle those on your own can make the “what ifs” much more terrifying. Not only does liability coverage not have a deductible, but the limits of a personal liability policy extend well beyond the property and casualty insurance coverage automatically offered by your homeowners insurance. Since legal and medical fees can easily add up, increasing your coverage with an experienced carrier ensures you’re properly protected. 

Unique situations also covered by liability insurance

Liability insurance can cover expenses related to common injuries such as broken bones, trips, and falls. If you're to blame, it can also help cover cosmetic or structural damage to someone else's home. But while those are most likely incidents for which you'd submit a liability claim, that's not where your coverage ends. 

Several less common accidents could occur in your home, and your personal insurance liability coverage will generally be triggered to cover them. Some unique personal liabilities examples might include things like:

• Dog bites (not available from all insurers)

• Food poisoning 

• Libel

• Slander

• Worker injury on your property

• Damage to someone else’s property or belongings 

If you hire a contractor, nanny, or other individual to work on your property and they are injured, you could be required to pay for their medical expenses. While they may have personal medical insurance coverage, you could still be liable if they can prove your negligence caused the injury. If they were to sue you for medical fees or lost wages, liability insurance can kick in to help you cover the costs.

Regarding this type of insurance, personal liability against injuries isn’t the only way you’re protected. Say your child hits a baseball through your neighbor's car window, and you’re considered liable for any repairs. Or if you’re visiting a friend’s house and break their equipment or appliance, and are expected to cover the replacement costs. In either case, your homeowners liability coverage could be tapped, protecting you even when you damage someone else's property.

What does personal liability insurance not cover?

Of course, even though personal liability insurance protects you in several different situations, it isn’t designed to cover everything. Personal liability home insurance doesn’t apply to things like:

• Intentional injuries

• Intentional damages to your home (no matter who causes them) 

• Personal injuries (those occurring to you or others in your household)

• Damage to your own vehicles (they should have their own auto insurance policies to provide adequate coverage)

• Any injuries that occur related to a small business being run out of your home (instead, you’ll need to purchase a Business Owners Policy, or BOP, which can help cover injuries from on-site visitors)

You’ll also be limited to the coverage values included in your policy. Your carrier will not pay the overage if someone's medical bills, lost wages, or other damages exceed your policy limits.

How much personal liability insurance coverage do I need?

Just because your homeowners insurance policy includes personal liability coverage doesn't mean you're adequately protected against any situation that could arise. In fact, you may want to consider increasing your limits or purchasing supplemental coverage to better protect yourself.

To determine how much personal liability coverage you need, you should consider the value of your assets. If you have assets that could be taken in a lawsuit—such as a second or vacation home, personal checking or savings accounts, investments, and the like—you might want to increase your coverage limits. 

Another consideration is your risk factors. How often do you have guests over, and what are their average ages? Do you have home features that might cause injuries, such as a pool, trampoline, or stairs? It might be a good idea to expand your coverage amounts to prevent you from paying too much out of pocket should an accident occur.

Umbrella insurance

If your homeowners insurance policy doesn't provide enough coverage or you simply want more versatile personal liability insurance, consider the value of umbrella insurance. 

Think of an umbrella policy like an actual umbrella when it rains: While your “roof” of homeowners insurance might offer some good protection from the storm while you’re on your property, it’s limited. Instead, umbrella coverage can follow you no matter where you go or what situations you encounter (much like a real umbrella in a storm).  

These extended protection policies typically offer coverage starting at $1 million and going as high as $5 million or even $10 million, depending on the carrier. They can protect you against a variety of liability situations, whether someone is hurt in your home or even in a car accident for which you’re at fault. 

While it might seem intense to get that much protection for an accident that hasn’t even happened yet, you’ll be thankful you did once those legal and medical expenses start piling up.

How much does personal liability insurance cost?

Increasing the personal liability limits of your homeowners insurance policy can be an easy and affordable way to protect yourself and your assets. Depending on your insurance company and the coverage you already have, increasing your personal liability coverage limits might only cost you a few extra dollars each month. 

When it comes to protection against liability, personal insurance on your home policy might not be enough. In this case, buying additional coverage in the form of an umbrella policy could fill that gap. The average umbrella policy costs around $380 annually for coverage between $1 million and $2 million.

Protecting yourself from the costs associated with accidents is not only a smart move, but it’s often required by mortgage lenders, landlords, and even condo associations. With no deductibles and traditionally low annual costs, liability insurance is a no-brainer that ensures you won’t go bankrupt from one incident. 

Looking to extend your coverage? Let us walk you through our liability insurance options to get you the security and peace of mind you need.

Still have questions?

Want to know more about personal liability insurance and your homeowners coverage? Here are some of the most frequently asked questions.

What is the difference between personal and public liability insurance?

Personal liability insurance is a product designed to protect you, an individual, against liability, while public liability insurance is a type of coverage for businesses. Both are similar in that they provide liability coverage against medical bills, lost wages, and other expenses if someone is injured on your property.

Is personal liability the same as general liability?

No, personal liability and general liability coverage are not the same. A policy with personal liability coverage will help protect you and others in your household if someone is injured on your property. A general liability policy, or commercial general liability (CGL), is a type of coverage designed to protect business owners from liability if an injury occurs or if one of their employees is responsible for property damage, injuries, or advertising damages. 

Is personal liability insurance necessary?

Personal liability insurance is often part of the coverage required by mortgage lenders and landlords. Even if you aren't required to buy this protective coverage, it can be an important tool in protecting yourself, your assets, and your peace of mind against any number of injuries or damages, and is typically included in homeowners insurance policies.

How much personal liability insurance do I need as a renter?

Your personal liability insurance requirements as a renter may be set by your landlord or property management company, so they might vary. However, a general rule of thumb is to buy enough liability coverage to adequately protect your current net worth (your existing assets minus any liabilities). Typical renters insurance policies allow for liability coverage in three standard limits: $100,000, $300,000, or $500,000.

Does personal liability insurance cover dog bites?

When it comes to personal liability insurance coverage, not all carriers will cover injuries related to dog bites. Among those that do, there may be limitations to things like the dog’s breed or prior notice that the dog resides on the property. Be sure to read your policy documents carefully to see what coverages are available, and reach out to your carrier if you have questions.