Homeowners Insurance Liability Coverage
Homeowners insurance liability coverage applies to any bodily injury or property damage you may cause to others. Depending on your home state and insurance company, you can select home insurance liability limits from $25,000 to $500,000 and more. It is generally recommended that a homeowner carry at least $300,000 in liability coverage. Learn more in our guide below.
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William Lemmon
Principal Broker
William Lemmon has been a licensed insurance agent for over 12 years. He is the principal broker and owner of Broadway Insurance Services in Los Angeles, CA. He works one-on-one with clients to create personalized plans that minimize risk and maximize savings. Being one of the foremost authorities on Airbnb and home-sharing property insurance, Lemmon offers his clients first-hand guidance on how t...
Principal Broker
UPDATED: Dec 10, 2023
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We are not affiliated with any one insurance provider and cannot guarantee quotes from any single provider. Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
Editorial Guidelines: We are a free online resource for anyone interested in learning more about life insurance. Our goal is to be an objective, third-party resource for everything life insurance related. We update our site regularly, and all content is reviewed by life insurance experts.
UPDATED: Dec 10, 2023
It’s all about you. We want to help you make the right coverage choices.
Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We are not affiliated with any one insurance provider and cannot guarantee quotes from any single provider. Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different companies please enter your ZIP code on this page to use the free quote tool. The more quotes you compare, the more chances to save.
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First and foremost, it is important to understand how to read a homeowner’s insurance policy in order to understand what general types are available to you. It’s easy to just choose a policy that seems to give you what you need. The problem is many homeowners find out when it’s too late that the policy they choose doesn’t actually cover their needs.
This could mean finding out your homeowners coverage won’t cover the rebuilding of your home after a fire. It could also mean finding out you don’t have enough liability coverage on your homeowners policy when someone falls down your stairs. These are just a couple of the possibilities.
Your homeowners policy consists of property coverage for the physical dwelling (other structures and contents as well) and liability coverage for any bodily injury or property damage you may cause to others. Generally, things like personal property coverage and coverage for other structures like detached garages (read our full “Garage Insurance: What You Need to Know” for more information) and storage sheds are set based on the replacement cost of your home. Your policy limits for liability coverage are up to you.
What are my liability limit options?
Depending on the state in which you reside, the company you purchase from, and the type of policy, you can select liability limits from $25,000 to $500,000 and more. Generally, companies offer options in multiples of $100,000. Then you choose the amount you want from a dropdown menu.
If you have “a lot to lose,” you may even consider a personal umbrella insurance policy to extend your insurance liability limit up to $1,000,000 and beyond. This is more common for homes with pools, larger homes, and otherwise homes where the residents have more assets they could lose.
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What liability limits should I choose?
Insurance allows you to be prepared for the unexpected. When you think about personal property, you can value every item you own. If you’re furnishing a whole house, $50,000 could evaporate very quickly.
Liability coverage is similar in many ways. It is generally recommended that a homeowner carry at least $300,000 in liability coverage. While $50,000 or $100,000 may seem like a lot, liability coverage is meant to cover any settlement with an injured party as well as legal and other fees. If you don’t have enough coverage, you’d be on the hook to personally pay the remainder of any claim. While homeowners insurance policies can cover hundreds of thousands of dollars in liability, some homeowners opt for umbrella policies for extra protection. (For more information, read our “What does homeowners insurance cover?“)
If your net worth is high, you may want to take advantage of umbrella policies that go up into the millions.
If you are highly risk tolerant, meaning you aren’t terribly worried about getting sued and having to personally pay for damages awarded to an injured party, you may choose lower limits. This is more common for condos and other small homes. If you’re considering going with lower personal liability coverage limits, you may want to discuss your actual risk with a professional.
Why do I need homeowner’s liability insurance coverage?
Simply owning a home puts you at risk for severe financial loss as a result of being found liable for someone’s bodily injury or property damage. This can happen to single income households with a small condo, people who own a multi-million dollar mansion, and everybody in between. Let’s look at an example of each:
Bodily Injury
Suppose a child visiting your home suffers a concussion while running around on a slippery pool deck.
The child may need to be taken to the hospital via ambulance and spend a couple of days participating in a series of tests to make sure they are not more seriously injured.
If the amount of damages exceeds your medical payments limit, you might have to file a claim to pay for the hospital costs.
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In the unfortunate event there was serious head trauma (or worse, death) as a result of the accident, costs could easily surpass $100,000. Unfortunately, this could also lead to legal action, attorney fees, etc.
Property Damage
Keep in mind, if your neighbor’s house is damaged, they would file a claim with their policy. By definition, you cannot make a claim on property you have no ownership interest in. However, if other property is damaged as a result of your negligence, your homeowners policy may kick in the same way auto liability coverage would kick in if you hit another car or a pedestrian with your car.
Renter’s insurance policy coverage types are similar, with the exception of the coverage for the dwelling (read our full “What is a dwelling fire policy?” for more information), in that they provide you liability and contents coverage. Not covering the dwelling replacement costs makes renters policies much cheaper than homeowners policies. Renters also aren’t liable for the full range of things a homeowner would be. Even renters can benefit from strong personal liability coverage to cover medical expenses, property damage, and more. (For more information, read our “Property Damage Liability vs. Physical Damage Coverage“)
Contact an independent insurance agent if you are not sure what your homeowner’s liability limits are or if you are thinking about increasing or changing your coverage.
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William Lemmon
Principal Broker
William Lemmon has been a licensed insurance agent for over 12 years. He is the principal broker and owner of Broadway Insurance Services in Los Angeles, CA. He works one-on-one with clients to create personalized plans that minimize risk and maximize savings. Being one of the foremost authorities on Airbnb and home-sharing property insurance, Lemmon offers his clients first-hand guidance on how t...
Principal Broker
Editorial Guidelines: We are a free online resource for anyone interested in learning more about life insurance. Our goal is to be an objective, third-party resource for everything life insurance related. We update our site regularly, and all content is reviewed by life insurance experts.