When Is Liability Coverage Included in a Homeowners Policy?

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Protecting your home doesn’t only mean protecting the physical aspects of it, like the structure of it or your personal belongings. It also means protecting you against any risk or damage that you may incur to others.
Think about it: You invite someone over for dinner, they trip over one of the dog’s toys, fall, and break their arm. Your guest could choose to sue, and you may be liable for legal and medical fees. The liability coverage on your home insurance can protect you against these types of claims. 

When Is Liability Coverage Included in a Homeowners Policy?

Liability insurance coverage is usually included in standard homeowners policies. The amount it covers will depend on your policy. Standard ones tend to have a coverage limit of around $100,000 to $300,000, but make sure to check with your insurance provider for more accurate details and information. 

What Does Liability Insurance Cover?

Liability insurance covers an array of situations, such as:
  • Medical Bills for Visitors: As noted, if someone gets hurt inside your home, your insurance can cover their medical bills. 
  • Pain and Suffering: A person can choose to sue for the pain caused to them. In case you’re found legally responsible, your insurance can help settle the claims. 
  • Lost Wages: When someone gets hurt inside your home in a way that impedes them from working, your insurance can help cover their lost wages if you’re found to be legally responsible. 
  • Death Benefits: If someone dies due to an accident in your home, their family members can ask for death benefits. Your insurance can once again help you cover these costs if necessary. 
  • Legal Costs: Your policy should cover any costs associated with going to court. 
  • Personal Liability Coverage Away from Home: If you’re away from home (on vacation, for example) and you cause damage to someone else’s property, your liability insurance can cover these costs as well. 
Note: If you happen to run a business from your home, and the accident that occurs is related to business activity, chances are your liability coverage won’t cover it. So, make sure to talk to your insurance provider if you run a business from home.

How Much Coverage Should You Have?

Most standard liability coverages have limits around $100,000 and $300,000. It usually covers between $1,000 and $5,000 in medical payments (note that these are averages amounts, and your insurance company can provide you with more accurate numbers). 
However, the amount that you should have will depend on the value of your home and belongings. When someone sues you, they can go after anything you may have of value; this can include jewelry, cars, or even property. 
So, what happens when the value of your assets exceeds the limit of your policy? In this case, you might want to opt for umbrella coverage; this is extra coverage that’s sold separately so that when the limit of your policy is reached, the umbrella coverage kicks in. 
The amount that it can cover will vary based on the plan you choose, your assets, your personal risk, and the annual premium you are willing to pay. But usually, umbrella coverage can offer millions of dollars in extra coverage for about $200 extra annually. 
Some companies have requirements before you can sign up for umbrella coverage. This can include a minimum amount in your liability coverage and car insurance. Insurers can also require that you bundle your car and home insurance with them before you can apply for umbrella coverage.

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