What is personal liability insurance?
No matter how cautious you are, accidents happen and can be very costly. Personal liability insurance is the part of your home insurance policy that steps in when someone makes a claim or sues you over bodily harm or property loss you caused. It can help pay for things like:
- The injured party's medical bills.
- Repair costs for the person's damaged property.
- Your legal expenses if the claim escalates into a lawsuit.
So say, for example, your neighbor stops by to bring your mail that got delivered to their house. Let's also imagine you've been meaning to repair the rail next to your porch steps – it's been a little wobbly lately. Unfortunately, that wobbly rail gave out while your neighbor held it to climb the steps, and they end up in the hospital after badly hurting their neck and back. They want you to pay $300,000 in damages accrued from missed work, surgery, and follow-up doctor visits.
If you didn't have personal liability insurance to cover this massive cost, you might have to sell your house (and other assets) to settle the debt. But if you have at least $300,000 in personal liability insurance, you can make things right with your neighbor and not sell your property or deplete your savings.
Think it won't happen to you? Consider this: according the National Safety Council (NSC), 52,500,000 people suffered nonfatal medically consulted injuries in homes in 2021.
What does personal liability insurance cover?
Personal liability insurance (sometimes called Coverage E or Coverage L, depending on your policy) can help pay for:
- Repairs and legal expenses if you accidentally damage someone's property
- Medical bills and legal expenses if someone is accidentally injured on your property
- Medical bills and legal expenses if you are liable for the accidental injury of someone at another location
- An injured party’s loss of wages
What personal liability insurance doesn’t cover
Your personal liability coverage typically doesn't help pay for:
- Intentional damage to someone's property
- Injuries you purposefully cause
- Damage to your own property or residents' property
- Your injuries or injuries of residents in the home
- Claims arising from your business or profession
- Auto damage or injuries that happen in an auto accident
It's also worth noting that your personal liability coverage won't address dog bite claims unless you add an animal liability endorsement to your policy.
How much personal liability insurance do I need?
The amount of personal liability coverage depends on a few factors:
- Your home's characteristics (e.g., if you have a pool, you likely need more liability protection because it increases the chance of someone getting hurt at your home)
- Your assets (if you have a high-value home, you may need more coverage)
- Your lifestyle (more visitors mean more opportunities for someone to get hurt)
Typically, homeowners insurance policies offer $100,000 in personal liability coverage at minimum. But because bodily injury liabilities are so expensive, it's often smart to at least have the value of your home in liability protection. That's because if someone is injured and sues for medical costs and additional expenses, like emotional damage, their lawyer may use your home's value as a basis for what they can reasonably expect to win from you in a lawsuit.
Some insurance providers offer a maximum liability coverage amount (ours is $500,000 in Florida, for example). Oftentimes, increasing your liability protection has little impact on your total premium.
Learn more about how much homeowners insurance you need.
When do I need personal liability coverage?
As a homeowner, your house is a major asset. It may be the biggest purchase you make your whole life. That also means if you have a home, you could lose it in a lawsuit.
That's why personal liability protection is so important.
You need liability coverage if:
- You're a homeowner
- You regularly host parties or have guests over
- You have a pool or trampoline
- You volunteer / work with the community
In some cases, it may even make sense for you to add extra liability protection by way of an umbrella policy. This is a cost-effective way to drastically increase your liability coverage.
Learn more in our state guides.
To learn more about homeowners or personal property insurance coverage in your area, check out our state-specific guides.
