What exactly is Personal Property Insurance?
December 18, 2021Other Structures Coverage in a Home Insurance Policy
December 21, 2021Personal Liability Insurance Cost
How Much Does Personal Liability Insurance Cost?
Most homes insurance packages contain personal liability coverage. Personal injury and property damage are covered under the personal liability section of your homes insurance. If you injure or damage someone else's property, your homes insurance will provide financial protection if you are held legally accountable.
Because increasing your personal liability coverage limit is usually affordable, we recommend getting enough coverage to safeguard your assets. Otherwise, you may expose yourself to possibly significant financial losses.
What Is The Definition Of Personal Liability Insurance?
If you are sued for harming someone or ruining someone's property, personal liability insurance will pay the expenses of the litigation. It is included in most residential insurance plans, including homeowners, renters, and condo policies, and can also be purchased separately. Submitting a claim under your personal liability policy is identical to filing a claim under any other form of insurance. We recommend calling your insurance carrier as soon as you become aware that you may be liable for the damage to property or the bodily injury of another person.
Personal liability coverage in a conventional homes insurance policy protects you against two types of losses: physical injury and property damage caused by you or inhabitants of your house. The following are examples of situations in which you may require personal liability insurance.
Body Injury: Assume your dog attacks a mail carrier on your property, causing the carrier to seek medical attention and miss work. The mail carrier may decide to sue you for expenditures such as medical bills, missed pay, and emotional anguish. If you don't have personal liability insurance, you'll have to pay the charges out of pocket if you're proven legally accountable.
Property Damage: If a tree on your property falls over during a rainstorm and destroys your neighbor’s roof, you may be liable for the damage. Your neighbor may then decide to file a lawsuit against you in order to collect financial recompense for the damage to their roof. Again, if you didn't have personal liability insurance, you'd be totally accountable for the harm.
While such incidents occurred on your property, bodily injury and property damage coverage applies to you and members of your household who are not on your property.
For example, if your dog escapes and attacks someone on the street, your house insurance personal liability policy will still protect you. Similarly, if you're jogging in the park and knock someone over, causing them to break a bone, any medical expenses you incur will be paid by the liability element of your house insurance if you're determined to be at fault.
In the event of an automobile collision, personal liability coverage would not apply. In such a case, you'd need a vehicle insurance policy that includes both personal injury and property damage coverage.
Is Personal Injury Covered By Homeowners’ Insurance?
Personal injuries are covered by homeowners’ insurance as long as your policy contains personal liability coverage, which most plans do. However, your personal liability insurance will not cover every injury. The only injuries covered are those caused by your fault. Intentional activities, as a result, are not covered by your personal liability insurance. Furthermore, your personal liability insurance only covers other people's injuries, but any injuries you get are covered by health insurance.
How Much Personal Liability Insurance Do You Need?
The more your financial holdings, the more liability coverage you should have. To reduce the danger of financial loss if you are sued, your liability coverage level should be as high as you can afford.
For example, if your net worth is $600,000 and you are sued for $400,000 in damages but only have $100,000 in coverage, the plaintiff can seize your assets to satisfy the remaining $300,000 in damages. Plaintiffs are more likely to pursue you if you have a big net worth since you can pay out a judgment more easily.
Category |
Amount |
| Personal Liability Coverage | $100,000 |
| Personal Injury or Property Damage Claim Brought Against You | ($400,000) |
| Recoverable From Personal Assets | $300,000 |
If you have $100,000 or more in assets, you should consider getting an umbrella policy or personal excess liability insurance. Both act as extra coverage with a larger maximum.
In other words, when your homeowner’s coverage limitations have been exhausted, an umbrella policy and personal excess liability insurance kick in. An umbrella policy extends coverage, whereas personal excess liability insurance supplements the underlying policy.
An umbrella policy or personal excess liability insurance would kick in for the remaining $300,000 in the situation above, protecting your assets. Keep in mind that your policy's coverage limitations will vary.
How Much Does Personal Liability Home Insurance Cost?
A greater limit for personal liability coverage is quite affordable to obtain. This is especially true when compared to other homeowners’ insurance changes, such as boosting residence coverage. The chart below shows the cost of expanding your personal liability coverage limits on a $200,000 State Farm policy.
Personal Liability Coverage |
Annual Homeowners Insurance Rate |
Cost of Increased Coverage |
| $100,000 | $4,339 | - |
| $300,000 | $4,354 | $15 |
| $500,000 | $4,364 | $10 |
| $1,000,000 | $4,374 | $10 |
According to our calculations, doubling your personal liability coverage costs only $15 extra each year. Remember that the actual cost will vary based on your home's location, among other things. However, raising your personal liability coverage limits should not result in a significant rise in premiums.
Despite the fact that umbrella plans give significantly greater coverage limits, the cost of personal umbrella liability policies remains inexpensive. A personal umbrella liability policy with $1 million of coverage will cost you between $150 and $300 per year. Keep in mind that a personal umbrella policy provides extra coverage, which means it kicks in after your house or vehicle insurance policies have been exhausted.