What does personal liability insurance cover?

By Allstate

Last updated: June 2023

Personal liability protection on a homeowners policy is a critical way of protecting yourself if you're held liable for someone else's injuries on your property – or cause damage to someone else's property. It can mean the difference between picking up where you left off and being on the hook for upwards of millions in legal fees, medical costs or repairs.

That's why understanding the scope of personal liability insurance is essential to protecting you, your family and your financial assets.

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What is personal liability insurance?

Personal liability coverage is a typical component of a homeowners insurance policy. While no one expects to be held liable after an accident at their home, liability coverage may help prevent you from paying out of pocket should the unexpected occur.

Think about, for example, what would happen if someone were to take an unfortunate spill down your stairs. Ultimately, you could be held responsible for their medical expenses if you are found to be legally liable for the accident.

Learn more about the personal liability coverage that a home insurance policy offers, and how to choose limits for your liability coverage. Here are some examples of the ways in which the personal liability coverage in a homeowners insurance policy may help protect you.

Things personal liability insurance may cover

Medical bills for visitors

Liability coverage may help pay for medical bills that result from a visitor's accidental injury at your home — and help prevent you from paying those costs out of pocket. Even if that person has health benefits, you could be held responsible for the expenses if it's determined that the injury happened as a result of your negligence — like if you failed to fix a broken porch step, for example.

Pain and suffering

Medical bills are one thing, but beyond that lies the possibility that you could be held responsible for any pain and suffering endured by a person who is injured in your home. If you're found legally responsible, liability coverage may help pay for the cost of a settlement against you.

Lost wages

If someone is injured while on your property and that injury results in their inability to return to work, you may be found legally liable for the wages they lose as a result. Liability coverage may help prevent you from paying out of pocket in a situation such as this.

Death benefits

Nobody wants to think about the possibility of someone having a fatal accident in their home, but it's something that you can't exclude. The average home liability policy also may cover death benefits to the family of someone who passes away as the result of an accident in your home or on your property.

Legal costs

If you're sued following an accident in your home, you may need a lawyer. Liability coverage may help cover your legal expenses, regardless of whether you're found responsible for damages.

Personal liability coverage away from home

Liability coverage also may help cover damages that stem from a covered loss that happens when you're away from home. For instance, if you accidentally cause damage to your hotel's lobby, this coverage may help protect you if the hotel company seeks reimbursement.

What homeowners liability insurance typically doesn't cover

Of course, there are some exclusions to home liability coverage. Purposefully inflicted injury typically isn't covered. For example, you may be covered if someone accidentally trips and falls down your stairs — but if it's intentional, it probably wouldn't be covered by insurance. Personal liability coverage would also not provide coverage for an injury to you or family member who lives in the house.

If you run a business out of your home, your personal liability insurance will probably not cover a claim for an injury or property damage that is related to or results from your work. Homeowner insurance may provide coverage for incidental business activities, but review your policy so that you understand what coverage may be included.

How much personal liability coverage should you have?

The amount of personal liability coverage you should have varies from person to person. You may want to consider having enough personal liability coverage to protect your net worth (home, cars, investments, etc.). The Insurance Information Institute (III) explains that many home insurance policies start with $100,000 of liability coverage, which you may want to update to at least $300,000 or $500,000 worth of liability coverage (or more in certain cases).

Set your coverage limits wisely

Remember, personal liability coverage will only pay up to a set dollar limit. When choosing your homeowners insurance policy, keep in mind that if a liability judgment exceeds your coverage limit, you may be financially responsible for the difference. A personal umbrella policy, which is an optional coverage, may help provide greater liability protection beyond the limits of a homeowners policy.