Part of the homebuying process is understanding the importance of homeowner’s insurance coverage. Standard homeowner’s insurance safeguards your home and unattached structures on your property against certain hazards, such as fire, wind damage, thunderstorms, hurricanes, tornadoes, and vandalism. A home is a high-risk environment where family, friends, neighbors, and guests are at risk for injury and property damage. Personal liability insurance is designed to protect homeowners against financial liabilities in the event that a person is injured or property is damaged on or around your premises.
What is Personal Property Liability Insurance?
Personal liability insurance provides homeowners with a source of financial protection and defense in the event that they are sued. Most modern homeowner’s insurance policies include personal liability coverage, which is the portion of the insurance that protects homeowners by offering personal injury and property damage coverage. In simple terms, if your actions somehow result in injury or damage to another person or their property and you are found legally liable, your insurance would cover the costs.
While personal liability coverage can be purchased as a stand-alone policy, it is most often included in residential insurance policies like homeowner’s or renter’s insurance. When you file a claim under your personal liability coverage, the process is very similar to filing any other type of insurance claim. In some cases, a standard personal property liability policy may not sufficiently cover your needs. If you have more than $100,000 in assets, you may want to purchase personal excess liability insurance or an umbrella policy. Both of these insurance policies provide homeowners with supplement coverage and have a higher limit.
What Does Personal Liability Insurance Cover?
Personal liability coverage within your homeowner’s policy provides comprehensive coverage for property damage or bodily injury sustained by others for which a covered resident of your household is legally responsible. A personal liability claim may include legal fees, medical bills, and similar requests for compensation. Here is an example of how this might work. Say that a guest visits your home and while walking through your yard trips over debris. The person suffers a broken leg and sues you for damages. Your personal liability insurance would typically cover the cost of medical bills and legal defense fees up to the set limit.
A typical personal property liability policy provides a minimum of $100K in liability coverage per incident. Homeowner’s insurance will usually cover a wide range of occurrences, such as lawsuits that homeowners face following an accident, bodily injury to an individual, and property damage that occurs as a result of your negligence. While personal liability does cover many types of incidents, there are some things it does not cover. This includes liability that results from an automobile accident, injuries or damages that were sustained by you or your family members in your home (whether intentionally or unintentionally), or business claims relating to your profession.
Common Coverage Types
Your personal liability policy may include a few types of coverages. When an incident occurs, this coverage may be invaluable. It is important to remember that each type of coverage has its own limits and, therefore, you will need to customize your policy to meet your unique needs. Some of the most common coverage types include the following:
- Coverage for your home, apartment, or condo
- Coverage for other structures on your property (for homeowner’s only)
- Personal liability coverage
- Personal property coverage for your content
- Additional living expenses (in the event that your home becomes uninhabitable)
Who Needs Personal Liability Coverage?
You may be wondering if you really need personal liability insurance. As a new homeowner, it is your responsibility to protect your home and family against the financial repercussions that can come with a liability claim. While all homeowners can benefit from having a personal liability policy, families with children and those who host gatherings are especially vulnerable to bodily injury incidents and damaged property. With personal liability coverage, you can maintain the peace of mind that your home and family are protected against the unknown. Even if you are not yet a homeowner, you can still benefit from a personal liability policy. This coverage is also available under other policies, such as renters and condo insurance.
Inquire About a Personal Liability Policy
Personal liability insurance is a crucial component of your home insurance coverage. Having personal liability coverage can help ensure that you are not on the hook financially for certain types of incidents that may occur on or around your property, such as if someone is injured on your premises. Your policy can also help protect you if you are found liable for damaging someone else’s property. For more information about personal liability insurance or to inquire about comprehensive homeowner’s insurance, contact the insurance professionals today at MFE Insurance.