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Your property insurance policy contains several different insurance coverages. Liability insurance, which protects you against accidents that may happen to other people in your house or apartment, is probably one of them. Whether you rent or own, liability insurance is usually worth it.

What is personal liability insurance?

More the owners, condo and renter’s insurance policies include liability coverage, sometimes referred to as “E-coverage”. Personal liability insurance provides financial protection if you are found guilty or negligent for injury to others or damage to property of others that occurs on your premises.

For example, if you are hosting a party and a guest trips on your carpet and breaks an arm, your liability coverage would apply if you were found liable for the guest’s injuries. The guest may be paid for medical expenses, lost wages, or pain and suffering from your personal liability coverage.

Personal liability coverage is purchased in dollars, typically $100,000 to $500,000. Occasionally, you may have the option of purchasing higher coverage limits on your home insurance policy. However, let’s say you think you need additional coverage and your insurer doesn’t offer higher limits. In this case, you can ask your insurer to take out a umbrella policy to extend your liability coverage.

What does personal liability insurance cover?

Incidents covered by personal liability could include:

  • A customer is injured on your premises.
  • Your dog bites a guest or passerby (some companies exclude liability for certain breeds of dogs).
  • Damage to a customer’s property occurs on your premises.
  • Injury or death occurs on your premises due to the use of a swimming pool or trampoline (some companies place restrictions on coverage for these items).
  • Someone slips and falls on your icy driveway or sidewalk.

It is important to note that you generally must be found guilty of injury or damage for liability coverage to respond. For example, suppose a tree on your property fell during a windstorm and damaged your neighbor’s garage. If so, your liability insurance will likely only pay for their damages if you are found to have negligently dealt with them. In other words, it would have to be proven that you knew the tree was dead or dying and that it could cause damage to your neighbor’s property. Otherwise, the cost of repairs would be covered by your neighbor’s policy.

Liability coverage may also be valid outside your home. If you’re walking your dog and he gets loose, knocks someone down and injures them, your liability insurance may still cover you, even if you weren’t home.

How much coverage do you need?

Most standard homeowner policies include personal liability coverage from $100,000 to $500,000. It can be hard to imagine running out of liability on your homeowners insurance, but the costs can quickly skyrocket if someone is injured. Your liability insurance also protects you in other ways. If, for example, your child accidentally burns down someone else’s house, you could be liable for a substantial amount in property damage and bodily injury. In such a situation, a lawsuit could wipe out all of your net worth, including your savings, the equity in your home and your assets.

To find the right amount of personal liability coverage, consider your future income, if you own multiple residences, and if you have teenagers, who may be at greater risk of damage. Depending on the assets you wish to protect, it may be beneficial to consider adding additional liability or umbrella insurance.

If in doubt, contact your insurance agent to assess your homeowner’s or renter’s policy coverages. Read the fine print of any quote to make sure you’re getting the personal liability coverage you want.

How much does private liability insurance cost?

the average cost of a home insurance policy in the United States is $1,312 per year for a policy with a residential amount of $250,000. The amount and percentage that pays the liability portion of your policy depends on your coverage limits and where you live. For example, you will generally pay more for a policy with $500,000 liability coverage than for a policy with $100,000 liability coverage.

Learn more: Affordable home insurance companies

Who needs liability insurance?

If you are responsible for your living expenses or have assets like a home, savings or investments, you may want to consider adding some form of personal liability insurance to protect yourself financially. To help you determine coverage amounts, add your net worth and the value of your assets. Home insurance personal liability coverage limits typically range from $100,000 to $500,000. If you have a high net worth and more assets, consider increasing your personal liability coverage or purchasing an umbrella policy.

The benefits of liability insurance

If you are sued for property damage or bodily injury inside or outside your home, your personal injury coverage may help pay for the costs of an attorney to represent you, litigation costs, or settlement costs. . If you don’t have personal liability insurance or have a low coverage limit, your disbursements could quickly add up in the event of a lawsuit. Your savings, home, vehicles and other assets could be at risk if you do not have the necessary coverage to adequately compensate the injured or damaged party.

Having personal liability insurance helps limit personal expenses if you are responsible for an accident, property damage or bodily injury. It could be an essential part of your financial plan.

How to buy liability insurance

If you have a homeowners insurance policy or a renters policy, check your coverages and personal liability limits. As your equity or the value of your home and possessions increases, contact your insurance agent to make sure you have adequate coverage. You can also take out individual liability insurance if you don’t have a home insurance policy.

Frequently Asked Questions

What is personal responsibility?

Liability insurance protects you financially if you or a family member is responsible for someone’s injury or property damage. Many types of insurance policies contain personal liability coverage within the policies. So check with your insurance company.

Do I need liability insurance?

If you have assets you want to protect, the cost of liability insurance is usually worth it. If someone is injured in your home, your dog bites a guest, or you are the cause of an accident, liability insurance likely covers the cost of medical bills, their damaged items, legal fees, and judgments. courts. If you don’t have personal liability insurance, you could lose your home or other property to pay the costs.

How much does liability insurance cost?

Many factors determine the costs of liability insurance. Some of the major factors that affect the amount of liability insurance costs include where you live, the amount of coverage you need, and claims history. It might be a good idea to shop around and compare insurance quote carefully to find the policy that gives you the coverage you need at the lowest price.

Methodology

Bankrate uses Quadrant Information Services to analyze 2021 rates for all zip codes and carriers in all 50 states and Washington, D.C. Rates shown are based on 40-year-old male and female owners with clean claim history, a good credit and the following coverage limits:

  • Coverage A, Housing: $250,000
  • Coverage B, other structures: $25,000
  • Coverage C, personal property: $125,000
  • Coverage D, Loss of use: $50,000
  • Coverage E, civil liability: $300,000
  • Coverage F, Medical Payments: $1,000

Owners also have a $1,000 deductible and a separate wind and hail deductible (if required).

These are sampling rates and should only be used for comparison purposes. Your quotes will be different.