Personal liability coverage protects you financially if you're responsible for damages or injuries to others. This protection extends to household members, so if your child accidentally damages your neighbor's property, you may be covered. Personal liability coverage comes standard with most property insurance policies, including homeowners, condo, and renters.
What does personal liability insurance cover vs. not cover?
|What's covered||What's not covered|
|Injuries to others||Car accidents|
|Damages to others||Intentional harm or damage|
|Lawsuits & legal fees||Your own injuries & damages|
|Dog bites (varies by insurer)||Business-related claims|
- Injuries on your property: If you're legally responsible, your personal liability insurance can help pay for someone else's injuries that occur on your property — up to the limits of your policy.
- Damage to others' property: Applies if you or your household members are at fault for the damage. For instance, your child hits a baseball through a neighbor's expensive stained-glass window.
- Lawsuits and lawyer/court fees: If you're sued over an accident, your personal liability coverage can help pay for a lawyer and legal expenses, as well as any settlements against you.
- Dog bites (varies by insurer): Check with your insurer to see if they cover dog bites. Many insurers require you to purchase animal liability coverage to be covered for dog bites, while others may limit coverage to certain breeds or exclude coverage altogether.
What's not covered
- Car accidents: Your auto liability insurance, rather than your personal liability insurance, covers you for damages or injuries you cause while driving.
- Intentional harm or damage: Injuries or damages you or a household member purposely cause to someone else are not covered.
- Your own injuries or damages: Personal liability coverage doesn't apply to accidental injuries or damages you cause to yourself or family. Instead, your health or property insurance would apply.
- Business claims: Any claims against you that relate to your business or profession are not covered by personal liability insurance.
How much personal liability coverage do I need?
Homeowners and renters policies commonly offer three limits of personal liability insurance coverage: $100,000, $300,000, and $500,000.
As with auto liability insurance, selecting a coverage limit that matches or exceeds your net worth is a good starting point. For instance, if your total net worth is $150,000, you should opt for at least $300,000 in coverage to fully protect your assets. If you need more than $500,000 in personal liability coverage, you should think about purchasing an umbrella insurance policy to extend your limits beyond those of your home or auto insurance policy.
You should also consider how risky your property is: Do you own a pool? Do you have a trampoline in your yard? These are called attractive nuisances for good reason; they raise the risk of a child wandering onto your property and injuring themselves. So, if you have any enticing backyard features, consider raising your personal liability coverage limit to offset the increased risk.
Does homeowners insurance cover accidental death?
Though difficult to think about, your personal liability insurance coverage may provide death benefits to the family of someone who passes away due to an accident on your property. This may include covering their funeral costs and related expenses.