What Is Personal Liability Insurance and What Does It Cover?

What Is Personal Liability Insurance and What Does It Cover?

What Is Personal Liability Insurance and What Does It Cover?

Personal liability coverage is typically part of a homeowners or auto insurance policy, and covers injuries to others and damage to their property that are your fault. It can help cover another person’s medical and legal costs and can help pay to repair or replace their damaged property.

These are just a few examples of the types of accidents personal liability coverage in your homeowners policy could cover:

  • A package delivery person slips on your icy sidewalk and breaks her arm.
  • Your dog bites a neighbor.
  • A tree falls and damages your neighbor’s property (such as their roof or car).
  • A gardener steps in a deep hole in your yard and hurts his knee.

Liability coverage in a homeowners insurance policy can cover you whether the accident happens directly on your property or not. For example, if your kid hits a baseball through your neighbor’s window, most homeowners liability insurance kicks in just as it would if a friend’s child were hurt jumping on your trampoline.

Personal liability coverage typically helps pay:

  • Medical costs
  • Legal expenses and lawsuit settlements
  • Damages for pain and suffering
  • Lost wages  

A standard homeowners insurance policy typically offers liability limits of $100,000 to $500,000. (“Limits” refer to the maximum amount of money an insurer is obligated to pay out.) A higher limit may be available if you want to protect assets worth more than that (your home, for instance) — and that will be reflected in your premium. A personal umbrella policy can extend your limit in increments of $1 million.   

Personal liability coverage in your homeowners policy doesn’t cover damage or injuries to you or your own property. It also does not cover damage or injuries related to car accidents or accidents that happen from running a business in your home. However, liability coverage in your auto insurance policy or business general liability insurance could cover these scenarios. It also doesn’t cover harm caused intentionally, and injuries or damage caused by some pet breeds may also be excluded, depending on the insurer. 

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