Skip to Main Content

Personal liability coverage

group of people having a backyard barbecue
10'000 Hours/Getty Images
group of people having a backyard barbecue
10'000 Hours/Getty Images
Bankrate Logo

Why you can trust Bankrate

While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for . This content is powered by HomeInsurance.com (NPN: 8781838). For more information, please see our

ON THIS PAGE Jump to Open page navigation

Your homeowners insurance policy contains several different types of insurance coverage. Personal liability coverage, which protects you financially against accidents that happen to others at your home or apartment, is typically one of the coverage types. Regardless of whether you rent or own, personal liability insurance is well worth consideration.

Lightbulb
Key takeaways
  • Personal liability helps cover legal costs of lawsuits brought against you for damage caused by you or members of your household to others.
  • Personal liability is often included as standard on homeowners insurance policies, but you may also be able to purchase it as a standalone policy.
  • This type of personal liability insurance does not extend coverage to car accidents, or business or commercial claims.

What is personal liability insurance?

Most homeowners insurance policies — as well as condo and renters policies — include personal liability coverage, sometimes referred to as “coverage E.” Personal liability coverage provides financial protection if you are found at-fault or negligent for bodily injury caused to others or for damage to the property of others that occurs on your premises.

For example, if you have a party and a guest trips on your rug and breaks an arm, your liability coverage would apply if you were found at-fault for the guest’s injuries. The guest may also receive compensation for medical expenses, lost wages or pain and suffering from your personal liability coverage.

Personal liability coverage is purchased in dollar amounts, usually ranging from $100,000 to $500,000. If you feel that you need additional coverage, you can increase your personal liability coverage limit by purchasing an umbrella policy from your insurance company.

How to get personal liability insurance

If you have a homeowners insurance policy or a renters policy, check your personal liability coverage and limits. As your net worth or the worth of your home and belongings increase, contact your insurance agent to make sure that you have adequate coverage in place in the event of personal liability claims.

To receive personal liability insurance coverage, you can either:

  1. Have a homeowners insurance policy. Standard homeowners, condominium and renters insurance policies come with a certain amount of personal liability insurance. The policy limits can be increased in specific increments.
  2. Have a standalone personal liability policy. If you do not have a property insurance policy, but still want personal liability coverage, you may be able to purchase a standalone comprehensive personal liability (CPL) insurance policy.

What does personal liability insurance cover?

Incidents covered by personal liability could include the following scenarios:

  • Guest injures themselves on your premises
  • Your dog bites a guest or passerby (some companies exclude liability coverage for certain dog breeds or dogs with a history of aggressive behavior)
  • Damage to a guest’s property occurs on your premises
  • Injuries or deaths occur on your premises due to the use of a pool or trampoline (some companies place specific restrictions on coverage for these items)
  • Someone slips and falls on your icy driveway or sidewalk and is injured

It is important to note that you must typically be found negligent for injuries or damage for liability coverage to apply. For example, suppose a tree on your property falls during a windstorm and damages your neighbor’s garage. In that case, your liability insurance will likely only pay for their damages if you are found negligent for them. In other words, it would have to be proven that you knew the tree was dead or dying and could cause damage to your neighbor’s property. Otherwise, the cost of repairs would be covered under your neighbor’s policy and designated as wind damage or some other cause of loss.

Liability coverage may also apply away from your home’s location. If your dog gets loose on a walk and knocks someone to the ground, causing injury to them, your liability coverage may still cover you even though you were not at home.

How much coverage do you need?

Most standard homeowners policies include $100,000 to $500,000 in personal liability coverage. It may be hard to imagine exhausting your homeowner’s insurance liability limit, but costs can spiral quickly if someone is injured. Your liability coverage also protects you in other ways. If, for example, your child accidentally burns someone else’s house down, you could be liable for a substantial amount in property damage and personal injury claims. In such a situation, a lawsuit could wipe out your entire net worth, including your savings, your home’s equity and your assets.

To come up with the right amount of personal liability coverage, consider your future earnings, whether you own multiple residences and if you have teenagers, who may be at higher-risk for damages. Depending upon the assets you want to protect, it can be beneficial to consider adding excess liability or umbrella insurance coverage.

When in doubt, contact your insurance agent to evaluate the coverage types in your homeowners or renters policy. Read the fine print in any quote to ensure you are getting the personal liability coverage you want.

How much does personal liability insurance cost?

The average cost of a homeowners insurance policy in the U.S. is $1,383 per year for a policy with a dwelling amount of $250,000, based on a homeowner with $300,000 in personal liability coverage. The amount and percentage that pays for the personal liability coverage portion of your policy depends on your coverage limits and where you live. For example, you will generally pay more for a policy with $500,000 in liability coverage than you will for a policy with $100,000 in liability coverage.

Learn more: Affordable home insurance companies

Who needs personal liability coverage?

If you are responsible for your living expenses or have assets such as a home, savings or investments, you might want to consider adding some form of personal liability insurance to protect yourself financially. To help determine coverage amounts, add up your net worth and the value of your assets. Homeowners insurance personal liability coverage limits typically range from $100,000 to $500,000. If you have a high net worth and more assets, consider increasing your personal liability coverage or purchasing an umbrella policy.

Benefits of personal liability insurance

The main purpose of personal liability insurance is to help cover legal costs if you are sued for property damage or bodily injury, whether in your home or outside of it. Some benefits of this financial protection include:

  • Paying for legal costs: Specifically, personal liability could help pay for legal counsel to represent you, litigation costs or settlement costs.
  • Extending coverage for everyone in your home: This includes family members as well as any pets or animals kept in the home, unless specifically excluded.
  • Acting as a financial buffer: Without this coverage, your out-of-pocket expenses could add up quickly. Your savings, house, vehicles and other assets could be at risk if you do not have the coverage to compensate the injured or damaged party adequately.

Methodology

Bankrate utilizes Quadrant Information Services to analyze 2022 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on 40-year-old male and female homeowners with a clean claim history, good credit and the following coverage limits:

  • Coverage A, Dwelling: $250,000
  • Coverage B, Other Structures: $25,000
  • Coverage C, Personal Property: $125,000
  • Coverage D, Loss of Use: $50,000
  • Coverage E, Liability: $300,000
  • Coverage F, Medical Payments: $1,000

The homeowners also have a $1,000 deductible and a separate wind and hail deductible (if required).

These are sample rates and should be used for comparative purposes only. Your quotes will differ.

Written by
Cynthia Paez Bowman
Personal Finance Contributor
Cynthia Paez Bowman is a former personal finance contributor at Bankrate. She is a finance and business journalist who has been featured in Business Jet Traveler, MSN, CheatSheet.com, Freshome.com and TheSimpleDollar.com.
Edited by
Insurance Editor
Reviewed by
Assistant Vice President & Claims Field Manager