What Is Personal Liability Coverage?

What Is Personal Liability Insurance?

Insurance is a way to protect people, property, and more from financial consequences when something goes wrong. One important type of insurance protection comes through personal liability insurance coverage. This type of insurance allows you to protect your home, your property, and the people who visit your home.

Personal liability coverage is insurance that covers bodily injury and property damage that occurs in your home or on your property. If an accident happens to someone at your home—like someone falling down the stairs—there will be costs associated with the medical bills and other fees that could add up quickly and lead to financial difficulties. Essentially, the costs would all have to be covered out of pocket, and that could lead to problems. Personal liability insurance is a way to cover those costs to protect your home and finances if an accident does happen.

Personal liability coverage also extends to protecting your family. This insurance covers damages that protected individuals are responsible for up to the limits of the policy. So if a covered individual throws a baseball through a neighbor's window, personal liability coverage insurance could help pay for the expense of repairing the window.

Because personal liability insurance is designed to protect you, it's important to make sure you always have the right coverage. Acrisure can help you find the right insurance for you to help you get started protecting your home, family, business, auto, and visiting guests.

You may also be asking: what is personal liability on home insurance policies? A typical homeowners insurance policy will cover three main elements: damage to your home, loss or theft of possessions, and personal liability for injury to others. You can also purchase personal liability insurance as a stand-alone policy if your plan doesn’t have this kind of coverage, or personal liability coverage for renters.

What Does Personal Liability Insurance Typically Cover?

There are dozens of potential situations where you could be legally and financially responsible for some kind of damage or other liability, and this article does not constitute advice. While your policy can’t outline every unique situation you find yourself in, there are a couple of standard scenarios that typically fall under the personal liability umbrella. 

Most coverage helps with legal fees, medical expenses, and repair costs in qualifying incidences. Here are some examples of personal liability claims that would typically be covered depending on the policy.

• Lawsuits if an accident occurs. If someone decides to sue you because of an accident they sustained on your property, personal liability insurance may kick in and help pay for the settlement cost. Coverage may also help pay for legal expenses or court costs.
• Bodily injury. There may be medical bills from someone dealing with a bodily injury at your home, and when it comes to medical payments, it may not matter whether you are legally responsible or not. Sometimes, if an injury prevents someone from working, you can also be found legally liable for the wages they end up losing. In worst-case scenarios, when someone suffers a fatal injury on your property, you would want to have coverage that contributes to funeral or burial costs. 
• Property damage due to negligence. If someone is hurt or something is damaged due to negligence, like failing to fix a damaged outdoor deck, then you may be held financially responsible for their medical bills or the damage costs.

What Is Typically Not Covered Under Personal Liability Insurance?

Don’t make too many assumptions about what your homeowners insurance policy covers and be sure to read the fine print. Every policy may be a little different, but most policies won’t include the following situations, for example.

• Liability due to an automobile accident. Any accidents where you are at fault should be covered by your car insurance.
• Bodily injury or property damage caused intentionally. Whether caused by you or a family member and even if the harm occurs in your home, any intentional injury or damage is not covered.
• Damage or injuries caused by you or a family member in the home. Liability insurance helps with coverage for injuries or damage placed on another person; otherwise, household members, including yourself, should be covered by health insurance.
• Business activities or claims connected to a profession. If you are conducting business from home, personal liability coverage typically won't cover issues related to your work. You may want to consider different types of business insurance. Learn more in our article: Do You Have the Right Insurance for Your Home-Based Business?

Do I Need Personal Liability Insurance?

While there usually aren’t any specific laws that dictate personal liability insurance as a requirement, a lot of people benefit from having a policy. This type of insurance is particularly designed to protect your net worth if you end up facing a lawsuit that could deplete your finances. Whether or not you need a personal liability insurance policy depends on how many assets you have to cover, which will also influence how much coverage you sign up for.

Assets include real estate, vehicles, bank accounts, investments, and other valuable possessions. It’s best to understand your assets and inventory before deciding how much personal liability coverage you want.

How Much Does Personal Liability Insurance Cost?

Some people are satisfied with what their homeowners insurance policy provides, which is typically a minimum of $100,000 in personal liability coverage. However, depending on the value of your total assets and other factors, you can pay for higher coverage amounts. Many policies cap coverage at $500,000, so if you want more coverage than that, you’ll likely need to add umbrella insurance.

Coverage with Acrisure

The right homeowners insurance policy can make all of the difference in protecting your finances, and personal liability coverage can be a deciding factor when it comes to choosing the best policy for you and your family. Acrisure can help you find the right personal insurance policy based on your needs, preferences, assets, and more.

Contact Us today to learn more about your personal liability coverage options and what will help suit your needs or request a homeowners insurance quote online now.