What Is Personal Liability Insurance?

Jason Lee
Jason Lee

A key element to any good homeowners or renters insurance policy is personal liability insurance. While this type of coverage is standard on most policies, it’s imperative to make sure you understand what you’re covered for and how much coverage you have.

So, what is personality liability insurance, exactly? By definition, personal liability insurance is financial coverage if someone or something gets injured or is damaged as a result of something you did by accident or out of negligence. The specifics of what is and what isn’t covered depend on the particular details of your unique policy.

How Does Personal Liability Work

When you purchase a homeowner’s or renters insurance policy, chances are you’ll get some level of coverage for personal liability. This coverage protects you financially if you or a member of your home causes harm to another person or someone else’s property. Generally, this covers events that are accidents or as a result of negligence, not events done on purpose.

If someone makes a legal or financial claim against you, your policy may cover the cost of things like legal fees, medical bills, or property repairs and replacement.

What Personal Liability Insurance Covers

What is covered under personal liability coverage depends heavily on the unique details of your policy. However, there are several things that are generally covered under most plans.

  • Any lawsuits that may occur as a result of an accident (non-auto).
  • Medical bills for bodily injury or harm to an individual not a part of your family.
  • Property damage or destruction that comes as a result of an accident or negligence.
  • Bodily injury or property damage that’s caused by one of your pets.

What Personal Liability Insurance Doesn’t Cover

While personal liability insurance does a lot to protect you and your family, there are some things that generally are not covered. You may be able to extend coverage to include these items, or they may be covered under a different type of insurance policy you can get.

  • Bodily harm and property damage resulting from a car accident.
  • Any bodily harm or property damage caused intentionally.
  • Injuries and damage to you or other members of your home.
  • Claims stemming from business-related activities.

Who Needs Personal Liability Insurance

Generally, it’s advised that most homeowners have some level of personal liability insurance. In a world where lawsuits are not uncommon, it’s important to know you’re protected in case of an accident or negligence. As long as you can afford the premiums, it is advised to carry some level of personal liability insurance.

How Much Personal Liability Insurance You Need

The more important question when it comes to personal liability coverage is how much insurance to carry. However, there’s no one-size-fits-all answer. The appropriate level of coverage depends on what you have to lose, the inherent risks in the area you live, and what you can afford. A trained insurance agent knowledgeable about your area may be able to give you the most accurate picture of your risk and the level of coverage that might be best for your unique situation.

How Much Does Personal Liability Coverage Cost?

Personal liability insurance costs may vary widely based on your level of coverage, your assets, and where you live. In general, coverage costs around $8–$15 per year for every $100,000 in coverage you carry. The higher prices are generally seen in major metropolitan areas where there’s more risk of an insurance-triggering event.

Other types of personal liability insurance

When it comes to covering you and your family in the event of accidents or negligence, there are other options outside of the standard personal liability insurance you may be interested in.

  • Medical payments to others: This type of coverage is for injuries to a guest in your home, regardless of who is at fault. The limits are generally much lower than personal liability insurance, as the product is designed for smaller claims incidents.
  • Personal umbrella policy: This type of policy aims to protect you where your other policies fall short. Generally, the coverage extends to your personal liability insurance, auto insurance, and boat insurance. If one of your existing policies isn’t able to cover all the costs of an incident, your personal umbrella policy can pick up the slack. 

Personal Liability FAQs

About the Authors

Jason Lee is a seasoned writer with a passion for writing about insurance, banking, and personal finance. As a Las Vegas local and area business owner for a decade, he knows the ins and outs of the city better than anyone.