A Guide To Personal Liability Insurance

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Did you know that you can be held responsible if someone is injured on your property? Perhaps you have an uneven yard or walkway and someone trips. Maybe someone is injured while they’re inside your home.

Regardless of what happens, you could be on the hook. Luckily, though, there is something you can do to protect yourself and that is to invest in personal liaability insurance.

How Liability Insurance Protects You

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Personal liability coverage protects you in several ways. If someone is injured on your property, it helps to pay the medical bills related to the injury. Sometimes, a person will decide to file a lawsuit about their injury.

If someone files a lawsuit against you, your insurance may provide you with legal defense and pay all of the related fees. In short, it protects you, your family, and your current and future assets.

What Personal Liability Insurance Covers

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Your personal liability policy is part of your homeowner’s insurance policy and covers a range of situations. It protects you if someone is injured on your property in any way, but it also protects you during some situations that may arise off of your property.

If your dog bites someone while you’re on a walk, you’re protected. If your kid accidentally breaks the neighbor’s window, your policy will pay for it. It even protects you if you accidentally hurt someone while you’re vacationing.

What a Personal Liability Policy Doesn’t Cover

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There is a range of situations in which your policy won’t protect you. Some of them include high-risk driving, anything that breaks the law, intentional damage to a person or property, and damages related to running a business.

If you have a question about a specific scenario and you aren’t sure if it is covered under your policy, you can ask your insurance agent. They’ll be able to determine if it’s covered and if not if there’s another type of policy that does cover the scenario you’re concerned about.

Who Needs Personal Liability Insurance

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Anyone who rents or owns a home should have a personal liability policy. You might think that you don’t need it, especially if you don’t have people over often, but the fact is that an accident can happen at any time.

It’s better to have the coverage and not need it than to need it and not have it. Typically, personal liability can be bundled with your homeowner’s policy and costs only a few extra dollars per month, so the investment is worth it.

Personal Liability and Rate Increases

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One question that many people ask is whether their insurance costs will go up if they need to file a claim. It would be nice if they didn’t, but the reality is that they probably will. In fact, filing a personal liability claim is the third-highest rate hike nationally.

If you file a personal liability claim, the exact rate at which your costs rise depends on which insurance company you use and how much they paid out to defend you. On average, you can expect to pay about 20% more after your claim is settled.

The Amount of Coverage Personal Liability Insurance Provides

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In most cases, your insurance provider will offer $100,000 as a base for your personal liability coverage. However, if you are worried that you need more coverage, the company can often provide you with more, for a higher cost of course.

If you don’t have people over very often and if there aren’t workers (such as cable providers or home renovation companies) in your home often, $100,000 is likely plenty. However, if you entertain often or if you are doing work on your home, it’s a good idea to purchase more coverage. You can review your needs with your insurance agent to determine exactly what to purchase.

The bottom line is that as soon as you start living on your own, you are responsible for purchasing personal liability coverage.

Without it, you could find yourself in a messy and expensive situation if someone is hurt on your property or if you hurt someone else while you’re walking the dog, at someone else’s house, or on vacation. Talk to your insurance provider to determine how much your personal liability insurance will cost.