What Is Personal Liability Insurance?
Personal liability coverage financially protects you against accidental bodily injury or property damage to other people.
Personal liability coverage, or personal liability insurance, as it is sometimes called – is a crucial component of your homeowners insurance policy. As a homeowner, it protects you against bodily injury or property damage that you or your household members accidentally cause to other people (or their property), whether the incident happens on your property or somewhere else entirely.
Let’s take a look at the finer points of personal liability insurance for homeowners.
TL;DR
- Personal liability coverage is a built-in component of your homeowners insurance policy. It protects you financially if you or a household member accidentally injures someone or damages their property.
- Coverage applies both at home and away from home, and includes legal defense costs if you’re sued for a covered incident.
- Personal liability claims have no deductible. Your coverage kicks in from the first dollar, up to your policy limit.
- Most homeowners should carry at least $300,000 in personal liability coverage. If you need more, an umbrella policy can extend your protection beyond standard homeowners limits.
What does personal liability insurance cover?
As part of your homeowners insurance policy, personal liability coverage protects you in the following situations:
- Bodily injury to others at your home: Suppose you’re hosting a backyard barbecue, and a guest trips over a loose paving stone, breaking their ankle. In this scenario, your personal liability coverage could kick in to cover the ensuing medical bills.
- Accidental damage to someone else’s property: Let’s say you and your daughter are playing catch, and one of you accidentally sends a baseball flying through the neighbor’s window. Your personal liability coverage could reimburse you for the window repairs, whether the damage was caused by you or by another member of your household.
- Damage or injury caused by your pet to another person or their property: Imagine that your dog chews through your neighbor’s patio sofa at the annual block party, causing some considerable damage. In this case, your homeowners policy could cover the costs of replacing the damaged furniture. Same goes for any other injuries or property damages that your pet causes, at home or away from home.
- Legal expenses: No one likes to think about being sued, especially not by a neighbor or friend. However, if you find yourself facing a lawsuit due to a covered incident, your personal liability coverage could help with the legal costs.
How does personal liability insurance work in practice?
The examples above give you the idea. But what does personal liability coverage actually do once a covered incident happens, step by step, dollar by dollar? Here’s how five common real-world scenarios play out.
Scenario 1: Guest injured at a backyard party
You’re hosting a summer barbecue when a guest trips on a loose patio stone and fractures their wrist. They need emergency care, two follow-up visits, and a course of physical therapy, totaling around $12,000 in medical expenses. A few weeks later, you receive a letter from their attorney threatening a lawsuit for pain and suffering. Your personal liability coverage responds on two fronts: it covers the guest’s medical bills directly, and because a lawsuit has been filed, your insurer assigns a defense attorney and covers legal fees, all within your homeowners policy limit. Personal liability claims have no deductible. The policy absorbs it entirely.
| Claim detail | Amount |
|---|---|
| Medical bills (ER, follow-ups, physical therapy) | $12,000 |
| Legal defense costs | Covered by insurer |
| Settlement demand (pain and suffering) | Up to policy limit |
| Your deductible | $0 |
| Your out-of-pocket cost | $0 |
| Recommended liability limit for this scenario | $300,000 |
Scenario 2: Dog bite injury away from home
You’re walking your dog at a neighborhood park when he bites a child on the arm. The child’s parents take her to urgent care for wound treatment and a follow-up visit, coming to $3,800 in total. Their attorney then sends a demand letter for an additional $10,000 in damages. Your homeowners liability coverage applies here even though the incident happened away from your property. The personal liability component of a homeowners policy follows you, not just your home. Your insurer covers the medical bills and, if the demand becomes a lawsuit, steps in to provide legal defense and cover any settlement costs up to your policy limit.
| Claim detail | Amount |
|---|---|
| Urgent care and follow-up visits | $3,800 |
| Attorney demand letter (damages) | $10,000 |
| Legal defense costs | Covered by insurer |
| Your deductible | $0 |
| Your out-of-pocket cost | $0 |
| Incident location | Away from home (covered) |
Scenario 3: Child accidentally damages a neighbor’s property
Your son is playing in the backyard and kicks a ball over the fence, shattering a panel of your neighbor’s glass greenhouse. The replacement cost comes to $2,200. Your neighbor is understandably frustrated and asks you to cover it. Accidental property damage caused by members of your household, including children, is a covered incident under your homeowners policy. Your insurer pays the repair bill directly. There’s no deductible on liability claims under a homeowners policy. This kind of mid-sized accidental property damage is exactly what the personal liability component of homeowners insurance is built for.
| Claim detail | Amount |
|---|---|
| Glass greenhouse panel replacement | $2,200 |
| Legal action involved | No |
| Covered under homeowners liability | Yes |
| Your deductible | $0 |
| Your out-of-pocket cost | $0 |
| Who caused the damage | Household member (covered) |
Scenario 4: Slip and fall on your icy driveway
It’s February, and a delivery driver slips on an unsalted patch of ice on your driveway, landing hard and breaking their leg. They’re out of work for six weeks. Between emergency treatment, orthopedic follow-ups, and lost income, the total claim comes to $28,000. Their attorney contacts you shortly after. Your homeowners personal liability coverage, which includes bodily injury liability, responds to cover the medical expenses and lost wages claimed. Your insurer provides legal defense if the matter proceeds to court. Slip-and-fall incidents on your property are among the most frequently litigated liability events homeowners face.
| Claim detail | Amount |
|---|---|
| Emergency treatment and orthopedic follow-ups | $14,000 |
| Lost income (6 weeks) | $14,000 |
| Total claim | $28,000 |
| Legal defense costs | Covered by insurer |
| Your deductible | $0 |
| Your out-of-pocket cost | $0 (within policy limit) |
| Recommended liability limit for this scenario | $100,000 minimum |
Scenario 5: Accidental damage while traveling
You’re checking out of a hotel and accidentally knock a decorative mirror off the wall while moving your luggage. It shatters, and the front desk informs you the replacement value is $900. The personal liability component of your homeowners insurance policy extends beyond your property and can apply to accidental damage you cause while traveling. This is one of the lesser-known benefits of homeowners coverage: the liability protection follows you, not just your address. Incidents at hotels, in stores, or at other people’s homes can all fall within the scope of your homeowners liability policy, depending on the circumstances.
| Claim detail | Amount |
|---|---|
| Decorative mirror replacement | $900 |
| Legal action involved | No |
| Covered under homeowners liability | Yes |
| Incident location | Away from home (covered) |
| Your deductible | $0 |
| Your out-of-pocket cost | $0 |
What isn’t covered by personal liability insurance?
Here are some things liability insurance doesn’t cover:
- Intentional property damage or bodily injury: If you intentionally punch your friend Jim in the face or purposefully key his car, your liability coverage (shockingly) wouldn’t be able to help you out here. To be covered, the injury or damage needs to be unintentional.
- Car damage: If you accidentally hit someone’s locked bike while trying to parallel park, it wouldn’t be covered by homeowners insurance. (That’s why you need car insurance.)
- Business-related damage: Let’s say you run a pottery studio out of your garage, and one of your students burns their hand on a hot kiln and sues. In this case, your personal liability protection wouldn’t apply, since this incident is a business activity.
- Injury to you or someone you live with: Your DIY roof repair goes a bit awry, and you fall off a ladder and break your arm. Here, your home insurance wouldn’t come into play. And same goes for injuries sustained by anyone else named on your policy-that would fall under your medical insurance.
How much does personal liability insurance for homeowners cost?
Personal liability insurance is a subcategory of your total homeowners insurance coverage. And the average cost of homeowners insurance across the US is $179/month, according to ValuePenguin.
FYI: At Lemonade, homeowners insurance prices start as low as $25/month.
Keep in mind, though, that the price of your individual policy will depend on a number of factors, such as where you live and how much coverage you opt for.
How much personal liability coverage do I need?
Coverage typically starts at $100,000, which means your home insurance company will pay up to $100,000 in legal fees, medical expenses, or damages per personal liability claim. However, it’s typically recommended that you opt for a personal liability coverage limit that would protect their assets in the event of an injury or lawsuit.
If you’d like to increase your liability policy limit, you can go right ahead! Increasing your coverage amount will probably cause your premium to go up a bit, but no worries – it shouldn’t be too drastic.
Personal Liability FAQs
Is it worth it to get personal liability insurance?
Yes, personal liability insurance provides valuable protection against potential lawsuits and claims for bodily injury or property damage that you or your family members may inadvertently cause to others.
Does personal liability insurance cover incidents involving borrowed or rented items?
Yes, personal liability insurance typically does cover damage to borrowed or rented items, but this can vary by liability policy, so it’s important to review your specific coverage details or consult with your insurance provider.
Do personal liability insurance claims require a deductible?
Nope, personal liability insurance claims usually don’t require a deductible. This means you don’t have to pay any out-of-pocket costs before your coverage kicks in when you file a claim.
What’s the difference between personal liability coverage and personal injury coverage?
Personal liability coverage protects against claims for physical damage to others or their property, while personal injury coverage protects against claims of non-physical injuries like slander, libel, false arrest, or invasion of privacy. While a standard homeowners policy includes personal liability coverage, personal injury coverage is a type of additional coverage that you may be able to purchase through certain homeowners insurance providers (but not Lemonade).
What does personal liability insurance cover in a homeowners policy?
The personal liability component of a homeowners insurance policy covers bodily injury to others on your property, accidental damage to someone else’s property, injuries or damage caused by your pets, and legal defense costs if you’re sued for a covered incident. In many cases, coverage also applies away from home. If you or a household member accidentally causes injury or property damage elsewhere, your homeowners liability coverage may still respond.
A few quick words, because we <3 our lawyers: This post is general in nature, and any statement in it doesn’t alter the terms, conditions, exclusions, or limitations of the policies issued, which differ according to your state of residence. You’re encouraged to discuss your specific circumstances with your own professional advisors. The purpose of this post is merely to provide you with info and insights you can use to make such discussions more productive! Naturally, all comments by, or references to, third parties represent their own views, and Lemonade assumes no responsibility for them. Coverage may not be available in all states. Please note that statements about coverages, policy management, claims processes, Giveback, and customer support apply to policies underwritten by Lemonade Insurance Company or Metromile Insurance Company, a Lemonade company, sold by Lemonade Insurance Agency, LLC. The statements do not apply to policies underwritten by other carriers.
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