What Is Personal Liability Insurance?

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Personal liability coverage is one type of coverage in a standard homeowners insurance policy that protects the homeowner when they are held responsible for another party’s injuries or property damages, such as your child throwing a baseball through your neighbor’s window or a guest tripping on your walkway and injuring their elbow. Covered expenses include medical expenses, repair bills and legal costs, such as attorney and settlement fees.

Key Takeaways

  • Personal liability insurance pays for a third party’s injuries or property damages if you can be held liable — your child accidentally throws an object through your neighbor’s window, for instance.
  • If a liability claim escalates to a lawsuit, personal liability insurance will pay for your legal fees.
  • Examples of covered costs include medical bills, property repairs and attorney fees.
  • Personal liability insurance will not pay for intentional damages or injuries caused by you or a household member, your own property damages and injuries or accidents caused while driving or during some commercial activity.

How Does Personal Liability Insurance Work

In a standard homeowners insurance policy, personal liability insurance operates alongside several other types of coverage to shield the homeowner against several types of losses. Personal liability insurance’s specific role is to provide financial protection when the homeowner can be held responsible for a third party’s injuries or property damages.

When an insurance company approves a liability claim, this coverage primarily pays for medical bills, property repairs and legal costs if a personal suit is filed against the homeowner. Homeowners typically do not pay a deductible for personal liability claims.

Without personal liability insurance, the homeowner would have to pay out of pocket to cover injuries and property damages for which they are liable.

Coverage will extend to all household members — not just the policyholder. So, if your child accidentally throws a baseball through your neighbor’s window, you may still be covered.

Personal liability insurance may step in for accidents that occur when you’re away from your primary residence. For example, you may be covered if you’re walking your dog at the park and it bites another person. However, your insurer may exclude coverage for certain dog breeds.

What Is Covered by Personal Liability Insurance?

what is personal liability insurance infographics

Personal liability insurance will cover losses when the homeowner can be held responsible for a third party’s injuries or property damages, including medical and repair bills plus legal fees if the homeowner is sued.

  • Bodily injury: Pays for emergency care and medical bills if you can be held liable for another person’s injuries.
  • Property damage: Pays for repairs or reimburses for damages to a third party’s physical belongings if you can be held responsible.
  • Lost wages: If the third party is unable to work due to injuries, personal liability coverage may cover a portion of their wages.
  • Legal expenses: If either a bodily injury or property damage claim escalates to a personal lawsuit, this coverage pays for legal expenses, including attorney fees, court costs and settlements or rewards.

Scenarios when personal liability insurance may step in include:

  • A tree on your property blows over during a windstorm and falls on your neighbor’s siding and damages it.
  • Your children are playing catch in the front yard and one of them accidentally throws the ball through your neighbor’s window, shattering the glass.
  • Somebody visits your home but trips because of a pothole in your driveway and breaks their ankle.
  • A guest falls down the stairs because the stair handle was wobbly and breaks their elbow.
  • Your dog bites another person at the park (certain breeds may be excluded).

What Isn’t Covered by Personal Liability Insurance?

Personal liability insurance will only cover third-party losses you can be held responsible for and will not apply in the following cases:

  • Intentional injuries or damages caused by you or a household member
  • Damages to your property (covered under personal property coverage)
  • Injuries to yourself or other household members (covered by health insurance)
  • Damages or injuries caused while driving (covered by auto insurance)
  • Losses caused due to commercial activity if you have a home-based business

How Much Does Personal Liability Insurance Cost?

Personal liability insurance is already included in a standard homeowners insurance policy, which costs, on average, $1,213.89 per year. Actual costs can vary based on multiple factors, including:

  • Zip code
  • Claims history
  • Coverage limits
  • Home age
  • Roof condition
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How Much Personal Liability Coverage Do You Need?

When determining how much personal liability coverage you need will depend on multiple factors, including the value of your personal assets, lifestyle and whether you have certain amenities in your home, like a trampoline or pool. Many policies start at $100,000 of liability insurance but the Insurance Information Institute (III) recommends having at least $300,000 to $500,000 of liability coverage.

Personal Umbrella Insurance Can Increase Your Liability Limits

A personal umbrella insurance policy provides additional coverage in excess of the limits in your standard homeowners insurance policy. For example, if your liability losses total $150,000 and you only have $100,000 in personal liability coverage, umbrella insurance would pay for the remaining $50,000. Personal umbrella insurance will step in when you exhaust the limits in various types of liability policies, whether it’s your home or auto policy.

Personal umbrella insurance may be useful if you have a pool, trampoline, pets, a teenage driver or some other element that can increase your liability exposure.

According to the III, umbrella insurance may cost $200 to $300 annually for one million dollars in coverage.

Personal Liability Coverage vs. Medical Payments Coverage

Medical payments coverage, often included in a standard policy, will pay for a third party’s medical bills similar to personal liability insurance. However, there are some slight distinctions. First, medical payments coverage steps in regardless of who was at fault and usually has lower limits — typically $1,000 to $5,000. Medical payments coverage is intended to treat small injuries and to help deter costly lawsuits, which would then be covered under personal liability insurance.


Personal Liability

Medical Payments

Included in Standard Policy


Usually, but not always


Covers medical costs only if you are liable

Covers medical costs regardless of who is at fault

Bodily Injury Coverage



Property Damage Coverage




$100,000-$500,000 (varies)


Legal Fees

Covers legal fees

Does not cover legal fees (intended as a deterrent to the injured party filing a lawsuit)

How To Get Personal Liability Insurance

Personal liability insurance is already included when you buy a standard homeowners insurance policy, so it is not a separate product you will need to purchase. We’ve outlined the steps below for insuring your home and gaining personal liability protection.

  1. Determine your coverage needs: Personal liability limits typically start at $100,000 but you may want to increase your limits if your home has features that increase your liability exposure, like a pool or trampoline.
  2. Shop around: Compare policies and quotes from multiple insurers to ensure you’re getting the best price possible. Be sure to ask about discounts that can lower your premium.
  3. Purchase the policy: After confirming the right policy, coverage will start when you pay your premium. Be sure to stay on top of your premiums or you will risk a lapse in coverage.
  4. Reassess your coverage needs: Shopping around at least once a year will help ensure you’re getting the best price available at that time while staying on top of your coverage needs.


Is personal liability coverage required?

There is generally no legal requirement for homeowners to maintain personal liability coverage. If you’re financing your home, then your mortgage lender will require you to purchase standard homeowners insurance, which will include personal liability coverage.

What is the difference between general liability and personal liability?

Personal liability insurance is one type of coverage in a broader homeowners insurance policy, while general liability insurance is a type of coverage for businesses.

Is personal liability the same as umbrella coverage?

Personal liability coverage and umbrella coverage are two different things. Umbrella insurance will usually cover the same types of losses as personal liability insurance but the homeowner must exhaust the limits of their personal liability policy before umbrella insurance coverage steps in.


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