If you have homeowners insurance or are looking to purchase it, you may have come across the term “personal liability insurance.” It comes standard with HO-3 policies — the most common form of homeowners insurance in the U.S. — but even if it’s included in a policy, many people don’t understand its utility until they need to use it. Essentially, personal liability insurance helps to cover damage (to people or property) that you’re responsible for. Personal liability insurance is broken down into two types of coverage:
- Bodily injury liability insurance covers medical bills, lawsuits, and other expenses if someone is injured due to your actions or while on your property.
- Property damage liability insurance covers the costs associated with damage you cause to someone else’s property. Note that you don’t necessarily need to be on your property for this part of your homeowners insurance policy to kick in.
Medical bills and lawsuits resulting from damages can rack up quickly, so it’s important that you have the coverage to protect yourself from the unexpected. Read on to learn more about personal liability insurance and how to make this coverage work for you.
What Personal Liability Insurance Covers
Personal liability insurance covers injury, damage, and lawsuits that you cause due to accident or negligence. Here are a few specific scenarios you can expect to be covered:
- Medical bills and costs associated with injury you cause to another person
- Injury someone sustains while on your property
- Damage caused by fallen trees from your property
- Costs associated with property damage that you are found at fault for
- Damage or injury caused by other members of your household, such as your children
- Property damage or injury caused by a pet
- Legal fees and defense costs from lawsuits
What Personal Liability Insurance Doesn’t Cover
While personal liability insurance covers many of the most common misfortunes that can occur in and out of the home, there are still plenty of limitations on your personal liability coverage. Personal liability insurance will not cover:
- Property damage or bodily injury caused by a car accident
- Intentional damage or injury caused by you or anyone on the policy
- Pet damage or injury caused by certain dog breeds
- Any claims related to your business
- Bodily injury to you or anyone else covered under the policy
Personal Liability Insurance FAQ
Is personal liability insurance required?
Personal liability insurance is typically included as part of your homeowners insurance policy, which isn’t required by law. However, homeowners insurance is a wise investment — without it, you may be on the hook for thousands of dollars of out-of-pocket expenses should anything go wrong on your property.
How much does personal liability insurance cost?
The price of homeowners insurance varies based on a slew of personal factors, including age, ZIP code, and condition of the home. Opting for higher personal liability coverage will increase monthly premiums, but it’s important not to skimp on necessary coverage just to save a few bucks per month. If price is a concern, try starting with our picks for the best cheap homeowners insurance providers.
How much personal liability insurance do I need?
How much personal liability insurance you need depends on your net worth. Your limit should cover the total value of your assets, minus any debts such as a mortgage. This is to make sure that your personal assets can’t be touched in the event of a lawsuit.
- Shopping for a new homeowners insurance policy? Our list of top-rated providers has everything you need to know.
- Learn more about the different types of homeowners insurance policies.
- Read our guide on calculating the appropriate amount of homeowners insurance coverage.