Home Liability Insurance Coverage

We never expect to be legally held liable for an accident that occurs in our own home. However, if someone is accidentally injured on your property—whether a guest falls down the stairs or a neighborhood child wanders into your yard and is bitten by your dog—you could be found legally liable, and thus financially responsible.

Personal liability insurance, thankfully, can help mitigate these risks and cover the associated costs if you are sued. Here is everything you need to know about how these policies work, how much they cost, and when you might need one.

Do I Need Personal Liability Insurance?

Simply put, personal liability insurance protects you and your family financially. If you are held liable for the damages or injuries suffered by another in your home or on your property, liability insurance will cover the costs so that you do not have to pay out of pocket.

Personal liability claims can include medical bills, legal defense fees, and other expenses up to the limit of your liability insurance. It may also provide coverage for accidental damage to someone else's property for which you are legally responsible.

How Much Does Home Liability Insurance Cost?

Personal liability coverage is typically the least expensive component of a home insurance policy, costing about $100 per year on average for each $100,000 in coverage. A higher limit for personal liability coverage, on the other hand, is relatively inexpensive to purchase. A personal umbrella liability policy, for example, can cost as little as $150 per year for coverage up to $500,000 and $300 per year for coverage up to $1 million. Keep in mind that the exact amount will vary depending on where you live, as rates in metropolitan areas may be slightly higher.

What Does Home Liability Insurance Cover?

Home liability insurance, also known as personal liability insurance, is included with the majority of property insurance policies, including homeowners, condo, and renters insurance. Here is a complete list of what is typically covered by home liability insurance:

Injuries on your property: If you cause an injury to someone on your property, your personal liability insurance can help pay for the resulting medical bills as well as pain and suffering. Even if the injured person has medical benefits, you may be held liable for the costs if it is determined that the injury occurred as a result of your negligence, such as failing to repair a broken stair step.
Damage to others’ property: Assume your child throws a baseball through your neighbor's window. This is an example of property damage, and liability insurance would cover both the window and any other damage.
Legal fees: If someone sues you after an accident in your home, your personal liability coverage will help pay for a lawyer and legal fees, as well as any settlements.
Dog bites (varies by insurer): Your liability coverage may or may not cover dog bites, depending on your insurance company. Some providers may require the purchase of animal liability insurance, while others may restrict coverage to specific breeds or exclude it entirely.
Lost wages: If someone is injured on your property and that injury prevents them from returning to work, you may be held legally liable for the wages they lose as a result. In such a case, liability insurance may help you avoid having to pay out of pocket.
Death benefits: While no one wants to think about the possibility of a fatal accident at home, they are an important part of personal liability insurance. Depending on your policy, death benefits may be provided to the family of someone who died as a result of an accident in your home or on your property, including funeral costs and related expenses.

If your policy's liability limits are insufficient, you may want to consider additional coverage, such as personal umbrella liability insurance, which provides an additional layer of personal liability protection. This will assist in covering costs if a serious accident occurs on your property that exceeds the limits of your liability insurance.

What Is Not Covered By Personal Liability Insurance?

Home liability insurance does, of course, have some exclusions. Here are some other situations that liability insurance does not cover:

Car accidents: In this case, your auto liability insurance will cover the damages or injuries you cause while driving, rather than your personal liability insurance.
Intentional harm or damage: You may be covered if someone is injured as a result of slipping on your icy driveway, but not if the injury is intentionally inflicted.
Your own injuries or damages: Personal liability coverage does not cover injuries or damages suffered by you or a family member. Instead, your health or property insurance would cover the cost.
Business claims: If you run a business out of your home, your personal liability insurance is unlikely to cover a claim for an injury or property damage caused by your work. Review your policy for business activities to ensure you understand what coverage may be included.

How Much Home Liability Insurance Do I Need?

Personal liability insurance limits on homeowners and renters policies are typically $100,000, $300,000, and $500,000. The amount of personal liability insurance coverage you will require is determined by two factors:

What is the extent of the liability risk associated with your property? Do you have a swimming pool, trampoline, or treehouse on your property? Each of these is classified as an "attractive nuisance" because they pose a liability risk to guests (especially children) on your property, whether they were invited or uninvited. If your property has any of these features, you may want to consider increasing your personal liability coverage limit to compensate for the increased risk.
What is the total value of your assets? Here's something that many homeowners are unaware of. If you are legally responsible for an injury and are sued, the injured party can sue you for all of your assets, not just those related to the insured property. As a result, selecting a coverage limit that matches or exceeds your net worth is critical for financial security.

For example, if you own two homes worth $400,000 combined, that's $400,000 in property assets alone that you should protect with liability coverage. If your total net worth is $150,000, you should choose coverage of at least $300,000 to fully protect your assets.

Given the low cost of liability insurance, you should always consider purchasing the maximum amount available. If you require more than $500,000 in coverage, an umbrella insurance policy may provide additional protection above and beyond the limits of a standard homeowners policy.

Home Liability Insurance Rates to Make You Smile

Home liability insurance is more than just a monthly payment; it is peace of mind for the future. And we're here to make it easier than ever to get comprehensive and affordable home liability insurance. You can choose a plan and get coverage in minutes thanks to our quick and low-cost home insurance quotes. Get yours today and say hello to a lifetime of home protection.