Personal Liability in Home Insurance: What It Covers
Personal liability coverage protects you if you’re responsible for another person’s injuries or property damage.
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Written byJamie Johnson
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Jamie Johnson is a Kansas City-based personal finance writer who’s been writing for Compare.com since 2023. Her work has also been featured on several of the top finance and business sites in the country, including Insider, Credit Karma, Bankrate, Rocket Mortgage, Fox Business, Quicken Loans, and The Balance.
For the past seven years, she’s dedicated more than 10,000 hours of research and writing to more than 2,000 articles about personal finance topics.
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Edited byNick Versaw
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Nick Versaw leads Compare.com's editorial department, where he and his team specialize in crafting helpful, easy-to-understand content about car insurance and other related topics. With nearly a decade of experience writing and editing insurance and personal finance articles, his work has helped readers discover substantial savings on necessary expenses, including insurance, transportation, health care, and more. As an award-winning writer, Nick has seen his work published in countless renowned publications, such as the Washington Post, Los Angeles Times, and U.S. News & World Report. He graduated with Latin honors from Virginia Commonwealth University, where he earned his Bachelor's Degree in Digital Journalism.
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In This Article
Personal liability coverage is the part of your homeowners insurance policy that protects you if you or a member of your household hurts another person or causes property damage.[1] It pays for medical bills and any defense fees or judgments from a lawsuit.
This article will explain how this coverage works, including the personal liability policy limits, exclusions, and costs. We’ll also explain how to choose the right amount of personal liability protection for your needs.
Key Takeaways
Personal liability insurance covers injuries that occur on or off your property, property damage, and any resulting legal defense costs.
Most experts recommend purchasing at least $300,000 to $500,000 in personal liability coverage.[2]
If your home insurance doesn’t provide enough personal liability coverage, umbrella insurance can help fill in the gaps.
What Is Personal Liability Coverage in Homeowners Insurance?
Part of a homeowners policy, personal liability coverage is often referred to as Coverage E. It provides protection if someone is injured on your property or a member of your household damages someone else’s property.
Your insurer should pay for damages up to your liability limits for each covered occurrence. It should also cover your defense costs if you’re sued.
Ultimately, home insurance protects you from financial losses stemming from disasters, theft, and accidents, and personal liability coverage is just one part of that. Homeowners insurance also includes coverage for the structure of your home, your belongings, and additional living expenses.
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What Personal Liability Insurance Covers
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Personal liability insurance coverage applies to you (the homeowner) and any members of your household. It kicks in if you or a housemate damages someone else’s property or injures them.[3]
And this can apply to damage and injuries that occur on or off your property, as long as they don’t stem from a vehicle accident you caused.
Injuries on your property
If someone is injured while visiting your property, your liability coverage may help cover that person’s medical expenses and lost wages.
For example, let’s say a delivery driver slips and falls on the sidewalk while delivering a package to your home. Once they file a claim, your insurance company will investigate to determine whether you’re at fault. If they determine you’re responsible, your insurer pays for the claim up to your homeowners policy limits.
Injuries you cause off your property
You may be surprised to learn that liability coverage extends beyond your home, too. If you or a covered family member injures someone outside your home, personal liability coverage may still apply.
The biggest exception is if you injure someone with your car. In that case, auto insurance would kick in.
For example, let’s say your child accidentally injures another child at a neighborhood park. Your home insurance may cover claims related to that child’s medical bills and your legal costs if their family sues you.
Damage you cause to someone else’s property
Liability insurance also covers damages you or a family member causes to someone else’s property. For example, let’s say your child accidentally breaks a neighbor’s window during a game of baseball. Your home insurance policy may cover the damages.
Legal defense costs
In addition to actual damages, your personal liability insurance should cover court costs if someone sues you for their injuries or damages. This is the case even if someone files a fraudulent or frivolous suit against you.
For example, let’s say someone pretends to fall and sustain a serious back injury on your property. Even though the injury isn’t real, if that person brings suit against you, your home insurance should cover your defense costs.
What Personal Liability Insurance Won’t Cover
Just like any other type of insurance, personal liability coverage has some exclusions, or things it won’t cover. Here’s a list of some common items that your personal liability policy won’t cover:
Intentional harm or damage
Vehicle- or business-related issues
Household damage (falls under dwelling or other structures coverage)
Injuries to you or a member of your household
That’s why it’s important to understand your policy limits and consider additional insurance you might need, like umbrella insurance or a business policy.[4]
For example, if you own a swimming pool and regularly host gatherings at your house, it may be a good idea to purchase an umbrella policy. Just make sure to read the umbrella policy provisions so you understand what it will and won’t cover.
How Much Personal Liability Coverage Do You Need?
Most home insurance policies include a minimum of $100,000 in personal liability coverage, and that may or may not be enough, depending on your needs. Increasingly, many insurance experts recommend bumping up your coverage to between $300,000 and $500,000.
Here are some factors to consider when you’re trying to figure out how much coverage you need:
Your net worth
Your assets
Pets, since certain dog breeds may be considered more of a bite risk
Pools
Trampolines
Lifestyle and hosting habits
If your homeowners insurance policy can’t give you high enough liability limits, you can also consider buying an umbrella policy to cover the gap.
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Average Costs of Personal Liability Coverage in Home Insurance
Personal liability coverage tends to be an inexpensive part of your homeowners insurance, but how much you choose can have a pretty significant effect on your overall insurance costs. For example, the national average for $100,000 in personal liability insurance and $300,000 in dwelling coverage is $71 per month, according to our data. But if you increase the liability limit to $300,000, the average jumps to $213.
The following table compares the average home insurance costs for a $300,000 home, based on the amount of personal liability coverage you buy.
The below rates are estimated rates current as of: Tuesday, August 19 at 12:00 PM PDT.
State  | $100,000 Liability Limit | $300,000 Liability Limit |
|---|---|---|
| New York | $21 | $105 |
| Wisconsin | $66 | $121 |
| Utah | $70 | $118 |
| Maine | $74 | $119 |
| Idaho | $89 | $136 |
| Ohio | $90 | $159 |
| Pennsylvania | $91 | $99 |
| New Jersey | $94 | $94 |
| Delaware | $99 | $88 |
| West Virginia | $102 | $135 |
| Virginia | $110 | $135 |
| Indiana | $118 | $175 |
| Connecticut | $143 | $146 |
| Georgia | $143 | $191 |
| Texas | $147 | $408 |
| Kentucky | $184 | $252 |
| Kansas | $214 | $278 |
| South Dakota | $231 | $173 |
| Arkansas | $241 | $255 |
| Oklahoma | $341 | $393 |
Average rates shown are based on a policy with $300,000 in dwelling coverage.
Higher Liability Limits vs. Umbrella Insurance: Which to Buy
You have two options when it comes to increasing your liability coverage: you can increase the limits on your homeowners insurance or buy an umbrella policy. Both extend your coverage for liability insurance incidents, but they serve different purposes and offer different types of protection.
Umbrella insurance provides broader protection and may cover risks that your personal liability coverage doesn’t. It can also extend across multiple policies, like home and auto insurance. In comparison, when you increase your personal liability insurance, it increases the limits of a very specific type of coverage.
If you regularly engage in activities that could increase your liability risk, you may want to consider buying a liability umbrella insurance policy. Since this policy provides broad coverage, it could cover things that a typical home insurance policy may exclude, like slander or libel.
If you have a high net worth and are worried about lawsuits, increasing your personal liability coverage may be enough. If you’re unsure of the best solution, an insurance agent can help you determine the right fit.
How to Save on Personal Liability and Homeowners Insurance
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Your home is likely one of the most valuable assets you own, so choosing the right coverage limits and endorsements is crucial. But you also want to find a policy that fits within your budget. Here are steps you can take to save on personal liability and homeowners insurance:
Review existing homeowners policy: Start by reviewing your current policy to determine whether you have enough coverage. Estimate how much you’ll need to cover your home’s structure, your belongings, and additional living expenses if you were temporarily displaced. You can read the declarations section and exclusions section to understand what it covers and what it doesn’t.
Assess risk factors: Next, assess any potential risk factors, like pets, a swimming pool, or a trampoline. Homeowners with a high net worth will likely need higher coverage limits as well.
Compare quotes: Apply for home insurance quotes with different limits from multiple companies so you can compare the policy limits, coverage, and costs that come with each. Comparing quotes is one of the best ways to find the right coverage and price for your situation.
Look for discounts: Many insurers provide discounts if you bundle home and auto insurance — meaning you buy both policies from the same company. You may also qualify for discounts if you fortify your home against storm damage, remain claims-free, or pay your annual premium in full.
Buy umbrella coverage: An insurance agent can help you find a low-cost umbrella policy to broaden your coverage.
Revisit your policies at least annually: Finally, review your policies at least once a year to account for any changes in your lifestyle or assets.
Personal Liability Home Insurance FAQs
Personal liability insurance protects you if you’re legally responsible for injuring someone or damage their property. Here’s some additional information about how this coverage works.
Are personal liability and property liability the same thing?
Your home insurance policy’s personal liability coverage will pay for damage you cause to someone else’s property. So your personal liability coverage includes property liability.
What’s an example of a personal liability claim?
If your dog bites and injures your neighbor, your personal liability coverage should pay for their medical bills. It’ll also cover any defense costs and lawsuit settlements if your neighbor sues you.
Why does homeowners insurance include personal liability coverage?
Homeowners insurance includes personal liability coverage to protect you from the financial and legal repercussions stemming from any accidents or injuries that occur on your property.
How much is homeowners insurance on a $500,000 house?
You can expect to pay an average annual premium of $3,876 for home insurance on a $500,000 home, according to Compare.com data.
How much should you pay for home insurance?
Many factors influence how much you pay for homeowners insurance, including the age and condition of your house, your location, and your claims history. Ultimately, how much you pay for home insurance depends on those rating factors and the coverage limits, policy options, and deductibles you choose.
Related Articles
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Sources
- American Institute For Chartered Property Casualty Underwriters. "Homeowners Liability Coverage."
- Insurance Information Institute (Triple-I). "How much homeowners insurance do I need?."
- Triple-I. "Homeowners Insurance Basics."
- Triple-I. "Should I purchase an umbrella liability policy?."
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Jamie JohnsonInsurance Writer
Jamie Johnson is a Kansas City-based personal finance writer who’s been writing for Compare.com since 2023. Her work has also been featured on several of the top finance and business sites in the country, including Insider, Credit Karma, Bankrate, Rocket Mortgage, Fox Business, Quicken Loans, and The Balance.
For the past seven years, she’s dedicated more than 10,000 hours of research and writing to more than 2,000 articles about personal finance topics.
Nick Versaw leads Compare.com's editorial department, where he and his team specialize in crafting helpful, easy-to-understand content about car insurance and other related topics. With nearly a decade of experience writing and editing insurance and personal finance articles, his work has helped readers discover substantial savings on necessary expenses, including insurance, transportation, health care, and more. As an award-winning writer, Nick has seen his work published in countless renowned publications, such as the Washington Post, Los Angeles Times, and U.S. News & World Report. He graduated with Latin honors from Virginia Commonwealth University, where he earned his Bachelor's Degree in Digital Journalism.