Personal liability insurance protects you from claims of bodily injury, property damage, and personal injury caused to others. This may be a part of your homeowners policy but it is also available as a separate policy.
Most people don’t want to sue anyone (or be sued), but it could happen. If someone’s on your property and you break their laptop or someone breaks their back on your recently mopped floor, you end up on the hook for more than what you can cover out-of-pocket. That’s where personal liability insurance is handy.
The key to personal liability insurance is to understand what it covers and how much it covers. In fact, you may already have this protection through your dwelling insurance—but is it enough? We’ll help you find out.
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What is personal liability insurance?
Personal liability coverage can be a component of your homeowners insurance or an umbrella insurance policy.
There are variations in coverage, but in general, a personal liability policy offers protection against claims resulting from property damage and injuries that you cause to other people. It does not cover damage to you or your own property.
Specifically, the major benefit of personal liability insurance is financial assistance if you are found liable for something harmful. Without this coverage, you’d have to pay out of pocket for the damages (and legal costs).
A standard homeowners policy includes some personal liability coverage. The minimum is typically $100,000, which is the amount that the insurance company would pay per person per incident.
If you need more protection, you can increase your limit or purchase a separate policy.
What does it cover?
This policy includes bodily injury, personal injury, and property damage to others and other people’s property.
Bodily injury is when someone is hurt because of your actions, negligence, or omissions. It also includes situations when your pet causes bodily injury.
Personal injury is a bit broader. It includes mental and emotional damage on top of bodily injury. This coverage may also pay for medical bills, loss of income, legal fees, and even funeral-related expenses if someone gets hurt on your property.
Property damage is when you damage someone else’s property. This could be a phone, a fence, or even a building. The incident may take place on or off your property.
Here are a few situations that may be covered by personal liability insurance:
- A guest visits your home and is hit by a falling bookcase. They need stitches and sue you for thousands of dollars.
- Your child visits a friend and accidentally starts a house fire.
- A delivery person slips on your porch while carrying a package.
Most homeowners policies do include some provision for medical payments if someone is accidentally injured on your property—even if you are legally responsible. But the limit may be as low as $1,000 per person, which wouldn’t cover much.
This policy is a great way to protect yourself against the unknown. You can increase your coverage within a homeowners policy or take out a separate policy. If you don’t have coverage and you cause an accident, you may have to pay out of pocket for the damages.
What’s not covered
Personal liability does not cover every single situation in which you cause harm. Here are some scenarios that are excluded:
- Intentional bodily injury or property damage caused in your home
- Injuries or damages that you or your family sustain at home
- Business-related activities or claims (self-employed and employees)
Any liability resulting from a car accident is usually covered by your auto policy.
Do I need it?
Personal liability is optional but it is well worth the extra protection.
First, find out if your homeowners policy already offers you some personal liability protection. It is usually packaged with your dwelling insurance and may be described as “comprehensive personal liability.” Now, find out how much coverage you have. The amount is usually between $100,000 and $300,000.
If you do not have this coverage—or if your existing policy doesn’t offer you enough protection—consider taking out an umbrella policy.
An umbrella personal liability policy is a good choice for people who do not own or rent physical property. It’s also a way to increase your coverage, on top of a homeowners policy. This policy could extend your coverage up to $1 million or more. It may even offer additional protections that a homeowners policy would exclude, like slander and libel.
Ultimately, your decision should balance your risk level and your financial stability. This policy can help ensure that your life is not destroyed by financial ruin if you cause unexpected harm to someone or something.
Finding the right insurance policy
You don’t want to pay any more than necessary—but you also need enough coverage to justify the price. How do you find the right policy for your situation?
The Jerry app is the fast, trusted solution for comparing policies and signing up for coverage.
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