What is personal liability insurance?

If you’ve worked hard to rent or buy a home, you probably aim to keep it safe for guests. But unfortunately, accidents can happen. That’s why many homeowners and tenants consider personal liability insurance.

So what is personal liability insurance? Typically part of a homeowners or rental insurance policy, it’s meant to protect you and your household from any injuries or damages that occur on your property. Learn more about what personal liability insurance covers and whether it might be right for you.

Key takeaways

  • Personal liability insurance coverage protects the policyholder from any injury or damage claims that may occur on their property.
  • Typically, liability insurance is part of a homeowners, condo or renters insurance policy.
  • An umbrella policy can extend beyond the financial limits of a personal liability insurance plan and cover additional claims, like libel and slander.

What does personal liability insurance coverage include?

Personal liability insurance—or comprehensive personal liability insurance—usually falls under the coverage of a homeowners insurance policy or an umbrella policy. It can protect homeowners or tenants from accidents and damages that occur on their property, including:

  • Slips and falls resulting in an injury
  • Property damage
  • Dog bites
  • Other accidents and injuries

The policy can also offer protection for damages that occur off your property at the hands of a member of your household—like if your child breaks a window in someone else’s home.

Personal liability insurance kicks in when the event is a result of negligence. If the policyholder is found legally responsible, the insurance company will likely have to pay the claim. For example, if your dog is off leash and bites a neighbor, you could be considered negligent. In this case, your insurance would generally pay the claim.

But if you’ve ordered a pizza and the delivery person gets injured by tripping over their shoelaces in your driveway, that might not be considered negligence on your part. The claim may not need to be paid by you or your personal liability insurance.

How much liability insurance do you need?

You can start by checking your homeowners policy to see what coverage you may already have. Often, a minimum of $100,000 in coverage is provided. If you feel that’s not enough, you could increase it to $300,000 or $500,000. You can also look into purchasing an umbrella policy.

What’s an umbrella policy?

While personal liability insurance can cover a variety of mishaps that can occur on your property, the coverage might only go so far. Some homeowners extend their coverage with an umbrella policy. An umbrella policy helps pay for any remaining expenses once personal liability coverage is tapped out. It can also cover additional incidents such as slander, privacy issues and false arrests.

Benefits of personal liability insurance

Purchasing personal liability insurance can help protect the policyholder and their finances. Potential benefits include:

  • Coverage for any accidents or damages the household is responsible for
  • Legal costs for representation
  • Financial protection for the home and any additional assets

Accidents can be pricey. Medical expenses, legal fees and lost wages add up fast, so having personal liability insurance coverage can be a relief for policyholders.

How to purchase personal liability insurance

If you want to purchase personal liability insurance, you’ll typically need a homeowners or renters policy in place. You can check to see what coverage is already included. If your asset worth has increased, it may be worth increasing your coverage. Talking with your insurance agent can help determine the level of need.

Personal liability insurance in a nutshell

If you own or rent a home, it may be beneficial to have personal liability insurance—which might be included in your homeowners or rental policy. Although accidents can be stressful, having the right amount of coverage can help bring peace of mind.

Homeowners insurance is typically required by a mortgage company. But even as a renter, protecting your assets is important. Read more about renters insurance and what it covers.

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