Personal liability insurance: What it is and why you need it

If a guest is injured at your home, you might be on the hook for their medical expenses — or your own legal bills if they sue you. But thankfully, your homeowners insurance policy covers you when you’re financially responsible for damages. An essential part of homeowners insurance policy is personal liability coverage. Policies generally cover accidental bodily injury or property damage caused by covered household members outside the home as well. 

Personal liability insurance is included in homeowners insurance, renters insurance, and other types of home insurance policies. Coverage includes everything from a dog bite to a baseball accidentally hit into a window. Personal liability protection ensures your family isn’t financially burdened even if they are found liable.  

Read our full guide to understand what personal liability insurance is and why you need it.

What is personal liability insurance?

Personal liability coverage is a part of homeowners and renters insurance policies and covers the cost of damages you might be liable for, such as medical bills and property repair.

The personal liability portion of your policy will also cover the cost of defending a lawsuit and judgments that come out of the lawsuit if you are sued, up to your policy limits. Its main purpose is to protect your assets if you are found liable for unexpected damage. 

What is personal liability protection on homeowners insurance?

Every homeowners insurance policy includes family liability protection. That means the policy protects you and your family if anyone is found liable for bodily injury or property damage. This generally includes incidents that happen on or off your property, assuming they are accidental. 

Even if an accident wasn’t your fault — for example, a neighborhood kid jumped too hard and hurt themselves on your trampoline or a party guest wore the wrong kind of shoes and slipped on gravel in your driveway — a court can still find you responsible. This is where family liability protection becomes extremely important.

There are a few different incidents that personal liability will cover:

Bodily injury

Bodily injury to others is covered by your personal liability insurance. It takes care of your legal responsibility when someone is injured in or around your home. For example, if someone fell down the stairs in your home or slipped on an icy sidewalk.

Liability works in conjunction with the medical payments (sometimes called guest medical) portion of your homeowners policy. Medical payments to others help pay for reasonable and necessary medical expenses of non-residents who are accidentally injured on or around your property. Your personal liability insurance covers any claims of negligence that caused the injury or a lawsuit.

Guest medical typically covers (up to your limit):

• Necessary medical and surgical expenses
• Dental work
• Ambulance
• Hospital costs
• X-rays
• Professional nursing services
• Prosthetic devices
• Funeral services

Property damage

Liability coverage will pay for accidental damage you do to someone else’s property. For example, your child throws a baseball through the neighbor’s window, and it damages an expensive piece of art. Liability would pay for both the window and the art piece, up to policy limits.

Who and what does personal liability insurance cover?

Who is covered

Anyone considered a household member and lives in your home would be covered by your policy. This includes your spouse, children, parents who live with you, and employees who work in your home, such as childcare providers. Oftentimes, this also includes pets — so if your dog bites someone, you can use personal liability insurance to cover the medical or legal bills.

Who isn’t covered

Notably, tenants are not covered, so if you rent out a portion of your home, your tenants will need their own renter’s insurance policy to be protected.

What does personal liability insurance cover?

Personal liability offers coverage for a wide variety of situations. Here are a few of the most common claims, as well as a few unexpected claims that would also be covered:

• Dog bites: According to the Insurance Information Institute, dog bite claims on homeowners insurance policies cost roughly $400 million a year, and they account for over one-third of all home insurance liability claims. Many dog bites are covered, but dog bites from certain breeds may not be covered. You’ll want to check your policy to know for sure if dog-related damages are covered.
• Slips and falls: A trip down the stairs or a fall on a slippery sidewalk can not only result in costly medical bills but also a lawsuit. 
• Neighborhood damage: A baseball through a neighbor’s window or a rock that was thrown by a lawnmower that damages your neighbor’s house or car are all covered.

Here are a few uncommon occurrences that are also covered:

• Libel and slander: Most, but not all, homeowner policies offer defamation of character coverage, which will cover you if you are accused of libel or slander. 
• Food poisoning: If your cooking at the holiday party makes your guests ill, your homeowners policy should cover the medical bills and possibly any resulting lawsuits. There are restrictions on most policies, so check the wording of your policy.
• Outside the home: Your homeowners policy may also cover accidents outside the home. If you damage a hotel room or hit someone with a golf ball you shank off the tee, your homeowners policy should step up to cover the damages.

What isn’t covered under personal liability insurance

Homeowners, condo, and renters insurance have exclusions. For instance, residents of the home can’t a medical claim with homeowners insurance for slipping on their icy front porch. Instead, the injured party would need to place a claim with their own health insurance provider for the resulting medical bills.

Also, your home vehicles are not covered under either the personal property or liability portion of a home insurance policy. So, while a neighbor can make a claim if your child throws a baseball and it breaks a window of their vehicle, if it happens to your vehicle, you cannot make a claim under your home policy. You could make a claim under your car insurance policy’s comprehensive coverage.

And to be clear, any intentional acts are not covered. For example, if you push someone down your staircase, you will be on your own for all bills associated with the incident.

Each home policy has its specific list of exclusions, so read over your policy in its entirety to find what yours are and call your agent to be sure.

How much personal liability coverage do I need?

The majority of homeowner policies come with at least $100,000 in liability, but this is the low end of the coverage. If a serious fall or injury were to happen in your home, medical expenses would quickly eat up this amount of protection, to say nothing of the cost of a lawsuit. 

Most experts recommend upping your limits to at least $300,000. The medical payments portion has its own limits as well. The amount of medical payment coverage you can purchase varies by the insurance company, but at least $5,000 is recommended.

Is family liability protection the same as personal liability?

Yes — personal liability coverage protects you in case of injury or destruction to someone else’s property. Personal liability is usually included as part of your homeowners policy. You might also see it listed as family liability insurance. Generally, both types of policies will cover everyone in your household, but check the fine print to make sure. 

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