What Does Personal Liability Cover in Your Homeowners Policy

what does personal liability cover in homeowners insurance policy
The personal liability section of your homeowner's insurance protects you against injuries that happen to other people.

If you need to know exactly what personal liability coverage you have as part of your homeowner’s insurance policy, this page will tell you the key facts and answer any questions you have. 

What is personal liability insurance for homeowners?

Personal Liability Insurance (PLI) is designed to cover you in the event of an accident that occurs either in or out of your home, resulting in either property damage or personal injury, whereby you are held legally responsible. Claims made against personal liability coverage could include legal fees, medical bills, and more; it can also cover accidental damages that you are responsible for, which take place in someone else’s property. 

Personal liability as part of a Homeowners Insurance policy can help you avoid having to pay out of pockets costs for events such as these, up to the limits set out in your policy. 

What does personal liability insurance cover?

Under a standard homeowners or renters insurance policy, PLI could offer protection, up to your policy limits, against the following:

  • Bodily injury to an individual, but not the policyholder
  • Legal action you could face as a result of an accident occurring either on your property or another person’s property
  • Property damage that arises as a result of your negligence

As mentioned, the coverage will apply up to your policy limits. If these limits don’t meet your needs, it is possible to buy additional personal liability coverage via a personal umbrella liability insurance policy. This will essentially give you an extra layer of coverage that would kick in once your primary personal liability coverage limits are exhausted.

What is not covered by personal liability insurance?

Most standard renters and homeowner insurance policies will cover specific personal liability claims; there is a range of instances that will not be covered. These could include:

  • Property damage or bodily injury that is intentionally caused by the policyholder or a member of their family
  • Liability that results from an auto accident (this is usually covered under an auto insurance policy)
  • Any activities related to your business or profession
  • Damages or injuries that happen to the policyholder or their family while at home

While the above information is accurate in most cases, your insurance agent or policy terms are the best way to know exactly what is and is not covered under the personal liability element of your homeowner or renter’s insurance.  

If you don’t have personal liability coverage for your home, please speak with a member of our friendly team to find out more and get a quick PLI quote arranged today. 

How much liability insurance do I need?

There is no right or wrong answer, and as with all insurances, you need to buy enough coverage for your individual risk profile. Talk with your local insurance agency to get a better understanding of the amount of coverage you need for your individual circumstances. 

Each individual insurer will offer different base liability policy limitations, but most start at $100,000. 

What is a personal liability insurance umbrella policy?

An umbrella policy is a cost-effective way to increase the value of the coverage you have in place. For example, if your standard level of personal liability insurance as part of your homeowner’s insurance provides you with coverage up to a limit of $500,000, buying umbrella insurance will give you an additional dollar value of coverage that increases your overall coverage limit. 

It can be particularly useful in the event of a substantial claim that exceeds your standard policy limits, and it is only activated when the coverage limits on your primary policy are exhausted. 


Is homeowner’s insurance mandatory for a homeowner?

It is possible to own a home and not buy homeowner’s insurance. However, if there is another party with a financial interest in your property, such as a home equity loan provider or a mortgage company, they will typically insist it is insured as part of the terms of your agreement. 

Who Should Buy Personal Liability Insurance?

Personal liability coverage should be considered as soon as a person is living on their own. It can be easily added to either a homeowner’s or renter’s insurance policy, and the cost of adding this is nominal. Regardless of your assets, it’s important to protect any future wealth or earnings. 

Are any liabilities for driving a vehicle covered by personal liability insurance?

The liability element for injuries and damages caused by you when you are driving a vehicle is not covered under Personal Liability Insurance. This can only be covered by your commercial or personal auto insurance coverage and will usually be excluded in the terms of the PLI coverage provided under your home insurance policy. 

Do you really need to buy personal liability coverage?

The occurrence of lawsuits and legal action has increased exponentially. According to the National Safety Council (source), there were more than 37.5 million individuals who sustained medically consulted injuries in the home. Combine this with figures released by the Insurance Information Institute (source) that suggest 1/20 homes have a claim each year, and 1/900 homeowner’s policies have had a liability claim made against them. 

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Whether you buy homeowners or renters insurance, you will always have the option to include personal liability insurance. It’s important to make sure you buy the right level of coverage. 

Speak with a member of the team at M&P insurance today for a discussion about buying personal liability insurance.  

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