The majority of homeowner, renters and condo insurance policies include personal liability coverage as part of a standard insurance policy. In most cases, liability coverage is referred to as “coverage E” and is listed on the declarations page of your policy.

Personal liability insurance will step up to cover medical and legal bills if you are found at fault or negligent for any injuries that occur at your home. It will also help cover expenses related to property damage if you are responsible for damage to other people’s property.

As an example of what personal liability covers, assume a guest trips on your stairs during a party, falls and breaks their arm. Your liability coverage would help cover the cost of medical expenses, lost wages as well as pain and suffering. If you are sued due to the accident, your policy will also help cover legal bills and any damages or judgements, up to your coverage levels.

Personal liability coverage is usually sold in amounts ranging from $100,000 to $500,00 or more. A standard homeowners policy typically includes $100,000 in coverage but it can be upped, most insurance agents recommend carrying at least $300,000 in coverage. Higher coverage levels will push up your premium a bit but if your coverage levels are exceeded you will have to pay an additional damages out of pocket.

What exactly does personal liability insurance cover?

Here are a few common issues that may result in claim on your personal liability coverage:

  • A guest falls, slips or otherwise injures themselves on your property
  • Your dog or other pet bites or otherwise injures a guest
  • Damage to a guest’s property such as their coat
  • Injuries or death occurs on your premises. This could be related to a fall or other incident such as a swimming pool or trampoline
  • A neighbor or guest slips on a sidewalk or driveway and is injured

In many cases your liability coverage will also cover damage when you are away from your home. If your dog gets loose while you are out for a walk and injures someone your liability coverage may cover the damage.

What is excluded by personal liability coverage?

Personal liability insurance will typically exclude the following:

  • Intentional damage is excluded so if you or someone in your house intentionally damages property or causes harm to a guest on purpose, your insurance will not cover the damage.
  • Personal liability insurance also doesn’t cover your own injuries or those of anyone that lives in your household. This type of expense should fall to your health insurance coverage.

Where to get personal liability insurance
If you have homeowners, renters or condo insurance, personal liability coverage is typically part of the policy. Check the policy declaration page for details on the coverage levels and as your net worth and assets increase as you age, you may want to consider upping your liability levels.
It is also possible to purchase a standalone personal liability policy. Check with your insurer on policy availability and recommended coverage levels.

How much does personal liability insurance cost?

The cost of liability coverage will vary by your location as well as your home but according to Bankrate, the average cost of a homeowners insurance policy in the U.S. is $1,428 per year for $250,000 in dwelling coverage. This coverage includes $300,000 in personal liability coverage.
As you up your personal liability coverage levels, your premium will increase but, in most cases, the premium increase is not massive.