Personal Liability Insurance for Homeowners: FAQs

You might think of your home as a safe, secure place, not only for your family but also for friends, relatives, business associates, and anyone else who might visit. Unfortunately, accidents can happen even in the most peaceful and low-risk settings, potentially leaving you on the hook for enormous damage claims.

If you worry about what might happen to your financial security in the face of an expensive liability lawsuit, you should learn about the world of personal liability insurance, from the types and amounts of coverage provided to events that might require more or different coverage. Check out these frequently asked questions.

Why Do Homeowners Benefit From Liability Insurance?

Most homeowners’ insurance policies include some provision for personal liability coverage. This type of insurance protects you against claims brought by others who suffer an injury in your home or on your property. Without this coverage, you would have to pay the costs and awards of a civil lawsuit out of your own pocket.

If such an injury occurs, personal liability insurance pays up to whatever limit you selected (see below) to pay some or all of the damage claims submitted against you. These payments can help cover compensation for such common claims as pain and suffering, loss of income, medical bills, legal costs, and death benefits.

What Situations Can Personal Liability Insurance Cover?

Personal liability insurance can cover many kinds of injuries sustained by visitors to your home. For instance, if someone trips in your home, slips on an icy driveway, sustains a bite from the family dog, or even dies in your pool, your personal liability insurance would help you cover the associated losses and damages.

The value of this kind of coverage also extends beyond accidents in the home. Your personal liability coverage may also protect you against losses related to damage you’ve caused to someone else’s property. In some cases, it may even cover you against lawsuits based on alleged slander or libel.

What Situations Don’t Fall Under Personal Liability Insurance Coverage?

Despite its obvious value for homeowners in many different scenarios, personal liability insurance also excludes numerous other potentially costly incidents and accidents. For example, if you deliberately made someone trip and fall in your home, your personal liability insurance wouldn’t protect you against the resulting lawsuit award.

Personal liability coverage may also draw the line at work-from-home environments. If someone suffers an injury in your home office, for instance, your policy might not cover it. For this reason, you may want to have business liability insurance coverage as well as personal liability coverage.

How Much Liability Coverage Do Homeowners Need?

When you decide to get personal liability insurance, you’ll find that you can choose from multiple coverage limits, with dollar amounts typically ranging between $100,000 and $500,000. The premium you’ll pay will depend, not only on the maximum payout, but also on other factors such as the location of your property.

You can get a clearer idea of how much personal liability coverage you need by thinking about the dollar value of everything you might stand to lose in a lawsuit. Calculate the total value of your personal assets, home, and personal possessions to come up with the amount you might need to cover with personal liability insurance.

What Should You Do if You Need More Liability Coverage?

Even a $500,000 personal liability policy can’t necessarily safeguard you against every kind of lawsuit. A catastrophic accident that causes someone’s death or permanent disability can result in claims ranging far higher than you might find on any ordinary insurance policy. For this reason, you may want to consider umbrella insurance.

Umbrella insurance acts as a supplement or enhancement to whatever other insurance coverage you already have. Once you’ve exhausted the maximum payout on your personal liability insurance, umbrella insurance steps in to cover the remaining unpaid costs. You can add millions of dollars in extra protection this way.

If you believe you need personal liability insurance, request a free quote from Kenneth Rhodes & Associates. Our insurance experts can evaluate your risk factors, help you choose the right level of liability insurance, and give you the peace of mind you seek.