What Is Personal Liability Coverage?
Personal liability coverage, included in homeowners, condo and renters insurance policies, provides financial protection if you or a household family member are legally responsible for accidentally injuring someone or damaging their property. Also known as Coverage E, it can help pay for medical bills, pain and suffering and repair costs up to your policy’s liability limit. It can also help pay for legal expenses if a lawsuit is brought against you for a covered personal liability claim. Coverage may apply to incidents both on and off your property, reducing the risk of large out-of-pocket expenses and making it an important part of your overall insurance protection.
What does personal liability insurance cover?
Personal liability insurance covers a variety of circumstances where you may be held liable for injuries or damages to others. Here are some common situations it can cover:
Bodily injury to others
May cover medical expenses and pain and suffering if a guest is injured either at your home or off your property due to an accident caused by you or a household family member.
Example: A guest slips on your icy walkway and breaks their wrist – Coverage E may help cover their medical bills and pain and suffering.
Damage to others’ property
Can help cover repair or replacement costs if you or a household family member accidentally damages someone else’s property.
Example: If your child accidentally throws a ball through a neighbor’s window, personal liability coverage may help pay for the repairs.
Legal defense
Coverage for your attorney fees and court costs, if you’re sued for a covered incident, even if you’re not at fault.
Example: If you’re sued in any of the above cases, personal liability coverage may assist with your legal defense costs.
What is not covered under personal liability coverage?
Personal liability coverage offers broad protection, but there are situations it does not cover. Knowing these exclusions can help you avoid surprises and make sure you have the right protection in place.
Injuries or property damage to household members: Personal liability coverage doesn’t include damage to property owned by or injuries to you or family members in your household.
Car accidents: Damage or injuries from a car accident are excluded from your personal liability coverage.
Business or professional liability: Claims related to business or professional activities – including those run from your home – aren’t covered.
Intentional or fraudulent acts: If injuries or property damage is purposefully caused by you or a household member, it’s not covered.
This isn’t a complete list – check with your insurance provider for details on exclusions and specific situations.
How much personal liability coverage do you need?
The amount of coverage you need usually depends on your assets, income and potential liability risks. Pools, trampolines, certain dog breeds and frequent guests can all factor into your risk assessment. If you can, try and match your coverage to your net worth or future earning potential to ensure you’re protected against significant liability claims.
Most insurance providers offer personal liability limits of $100K, $300K or $500K. Depending on your needs, you may want to choose higher limits for extra protection. For coverage that extends beyond standard policy limits, consider purchasing an umbrella policy.
Get the right home insurance coverage for your needs
Personal liability is just one part of your overall homeowners safety net. It’s important to remember that a well-rounded homeowners policy should include a variety of coverages to protect from life’s unexpected events.
Dwelling coverage: Protects the physical structure of your home against damage from covered perils in your policy.
Other structures coverage: Covers buildings that aren’t attached to your home, like a detached garage, shed or fence.
Loss of use coverage: Helps pay for temporary living expenses, like hotel stays or meals, when a covered loss makes your home unfit to live in.
Medical payments coverage: Helps provide coverage for injuries to others if they’re accidentally hurt on your property, regardless of fault.
And remember, review your insurance coverage regularly to ensure it keeps pace with changes to your home, lifestyle and personal risk profile.
Your Policy, Policy Declarations or Amended Declarations in effect on the date of loss is the primary source of reference for your coverage, coverage limits and deductible amounts.
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