Personal Liability Can Be a Lifesaver: What is it?

In many cases, when shopping for a homeowners insurance policy people tend to overlook the personal liability coverage portion of the policy. This can be a dangerous move as personal liability can be a lifesaver in certain situations. If you are shopping for a new homeowners policy, make sure your agent takes the time to cover the personal liability portion of the policy. 

Here is a quick overview of what personal liability covers:

What is Personal Liability?

While the main function of a homeowners insurance policy is to protect the structure of your home and your personal possessions, it also comes with a personal liability section. This part of the policy covers bodily injury claims if someone is injured on your property as well as property damage claims. 

• Bodily Injury: This insurance protects you both at home and when you are out and about. As an example, if you have a party at your home and someone trips down your stairs, slips on ice or is bitten by your dog, the bodily injury portion of your policy would step up. 

It covers the cost of medical bills for the injured person as well legal costs if your guest sues, up to your coverage limits. The protection doesn’t end at your home. If you are out at a restaurant, concert or just walking around and accidently knock someone over, trip them or otherwise cause a bodily injury, your homeowners insurance will step up to cover the medical bills. 

It should be noted that liability coverage only covers accidents. If you deliberately injury someone or end up in a fist fight your insurance will not cover those costs.  

• Property Damage: This portion of the policy isn’t designed to protect your home, it covers damage you or your family do to other people’s property. As an example, your child puts a baseball through a neighbor’s window or your spouse backs over a neighbors mailbox, this part of your insurance would cover those costs up to your policy limits. Bigger claims such as one of your trees falling on a neighbor’s house or car would also be covered. 

One More Coverage

The personal liability portion of your homeowners insurance offers one more bit of protection. It covers you against libel and slander claims. This coverage is more important than ever in the age of social media and the ability to transmits your thoughts and comments to a large audience easily and quickly. 

Libel is a published false statement that is damaging to a person’s reputation. If you are sued for libel the personal liability portion of your policy will help cover your legal costs as well as any settlements or judgements up to your policy limits. The same is true for defamation. Libel and defamation can easily occur these days, a not so well thought out text, tweet or review can be deemed libel or defamation. 

Limits of Personal Liability Coverage

In most cases, a homeowners insurance policy comes with $100,000 in personal liability coverage but this can be raised for an additional cost. Most industry experts recommend carrying $300,000 in personal liability and even more if you have a lot of assets to protect. 

In addition to raising your personal liability limits, you can extend your liability coverage with an umbrella policy. Umbrella policies supplement the personal liability in your homeowners insurance and are sold in $1 million increments. Umbrella policies are very affordable, usually costing between $150 and $300 for $1 million in coverage.