Personal Liability Insurance: How Much Does It Cost?

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Personal liability coverage is included in most homeowners insurance policies. The personal liability portion of your policy covers personal injury and property damage. If you're found liable for someone's injury or damage to their property, your homeowners insurance protects you. Increasing your personal liability coverage limit is typically inexpensive, so it's wise to buy enough to protect your assets. Otherwise, you may leave yourself exposed to large financial losses.

What is personal liability insurance?

Personal liability insurance covers the costs if you're sued for injuring someone or destroying someone's property. It's included in most homeowners, renters and condo insurance policies. Or it can be purchased as a stand-alone policy.

Filing a claim under your personal liability coverage is similar to filing any other insurance claim. It's best to contact your insurance company as soon as you're aware that you may be responsible for someone's property damage or bodily injury.

Personal liability in a standard homeowners insurance policy protects you if you — or someone who lives in your home — are responsible for either of two things: someone else's bodily injury or property damage. Let's look at a few situations where you might need personal liability.

Bodily injury: Say your dog bites a mail carrier on your property, and the carrier has to get medical care and miss work. They could sue you for related expenses, such as medical bills, lost wages and emotional distress. Without liability insurance, you'd have to pay out of pocket if you're found liable.

Property damage: If a tree located on your property falls over during a thunderstorm and damages your neighbor's roof, you could be responsible for the damage. Your neighbor could pursue legal action against you for roof repairs. Once again, without personal liability insurance, you'd be solely responsible for paying.

While those situations took place on your property, bodily injury and property damage protection extends to you (and members of your household) outside of your home.

For instance, if your dog runs outside and bites someone down the street, your policy would provide coverage. Or, say you're running at the park and accidentally knock someone over, causing them to break a bone. Their medical bills would be covered under the liability portion of your home insurance if you're found responsible.

Personal liability coverage would not apply in a car accident. For that, you'd need a car insurance policy with bodily injury protection and property damage coverage.

Does homeowners insurance cover personal injury?

Homeowners insurance covers personal injuries if the policy includes personal liability coverage, — most do. However, not every injury will be covered. The only injuries covered are those that result from your negligence. Intentional acts aren't covered. And your personal liability insurance only applies to others; your own injuries would be covered under your health insurance.

How much personal liability coverage should you have?

The more financial assets you have, the more coverage you should buy. Your liability limit should be as high as you can afford, to lower the risk of financial loss if someone sues you.

For instance, say your net worth is $600,000 and you're being sued for $400,000 of damage. If you only have $100,000 of coverage , the plaintiff can come after your assets to make up for the remaining $300,000. People are more likely to sue if you have a high net worth, since you are better able to pay a judgment.
Personal liability coverage$100,000
Personal injury or property damage claim brought against you$400,000
Recoverable from personal assets$300,000
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If you have assets of $100,000 or more, consider an umbrella policy or personal excess liability insurance. Both are forms of supplemental coverage with higher limits.

In other words, an umbrella policy or personal excess liability insurance kicks in after your homeowners coverage limits are exhausted. An umbrella policy provides broader coverage, while personal excess liability insurance adds coverage to the underlying policy.

In the scenario above, an umbrella policy or personal excess liability insurance would kick in for the remaining $300,000, protecting your assets. Keep in mind that coverage limits will depend on your policy.

Home insurance personal liability: How much does it cost?

A higher limit for personal liability coverage is fairly inexpensive. This is especially true compared with other homeowners insurance changes, like increasing dwelling coverage. The table below outlines the cost of increasing your personal liability coverage limits on a home with a $200,000 policy with State Farm.

Personal liability coverage
Annual homeowners insurance rate
Cost of increased coverage

Based on this sample, tripling your personal liability coverage from $100,000 to $300,000 only costs $15 more per year. Keep in mind that the exact amount will depend on your home's location and other factors. That said, you shouldn't see a drastic increase in rates when upping your personal liability coverage limits.

Even though umbrella policies provide much higher coverage limits, the cost for personal umbrella liability policies remains low. You can expect to pay anywhere from $150 to $300 per year for $1 million of coverage. Keep in mind that an umbrella policy provides supplemental coverage, meaning it goes into effect after you've exhausted your homeowners or auto insurance policy.

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