Personal Liability Insurance vs Renters Insurance

What Is Personal Liability Insurance vs. Renters Insurance?

Being hit with a lawsuit can create serious problems for even the most financially-secure individuals. Litigation costs—not to mention the prospect of having to pay any damages awarded by the court in the event that you lose your case—can easily drain bank accounts and plunge defendants deep into debt. But there is a way to prepare for these kinds of dangers: personal liability insurance.

Here, we take a closer look at personal liability insurance, how it relates to renter insurance, and what kind of personal liability coverage you can expect.

What Is Personal Liability Insurance for Renters?
Personal liability occurs when you or other members of your household are deemed legally responsible for an accident that results in either property damage or bodily injury sustained by others. For example, if your dog gets loose and bites someone, or if you have a house guest that slips on your wet floor and breaks their arm, the injured party may decide to sue you for damages. Likewise, if you have a child who hits a baseball through a neighbor’s window and breaks a television, you may be held responsible for the damages.

Personal liability insurance protects you from having to pay out of pocket to cover these and other kinds of damages—depending on your coverage limits—and may also pay for your legal costs resulting from lawsuits. In other words, personal liability insurance is an important safety net to have under you, which is why it’s typically included as part of the standard renters insurance policy.

Personal Liability Insurance vs. Renters Insurance
Personal liability insurance is not, strictly speaking, the same thing as renters insurance.

Renters insurance is a comprehensive way to protect your possessions and your finances from unexpected dangers. Personal liability insurance is an essential part of renters insurance, which generally also includes personal property insurance and additional living expenses insurance.

What Does Personal Liability Insurance Cover?
Personal liability coverage is generally comprehensive enough to cover a range of possible scenarios, including the following:

Bodily Injury or Property Damage Caused by Pets
Dog bites are some of the most common personal liability claims, with most dog breeds covered by personal liability insurance policies (though some larger, stronger, or more aggressive breeds may be excluded from specific policies). Property damage caused by pets may also apply, such as if your cat scratches up a guest’s expensive leather jacket or if your dog runs through a neighbor’s screen door.

Bodily Injury or Property Damage as a Result of Negligence
An injury to a guest or other party as a result of negligence may also lead to liability claims. If you fail to properly de-ice your walkway and a food delivery person slips and hurts their back, or if you’re renting a single-family property and one of the trees dies and falls onto a neighbor’s house, personal liability insurance may cover the costs and damages.

Legal Expenses from Lawsuits for Damages Covered by the Policy
Personal liability insurance typically also covers legal fees and court costs related to personal liability claims. This coverage exists whether or not you are found responsible for the damages.

Taken all together, personal liability coverage needs to be capable of handling the full range of costs associated with personal liability lawsuits. This includes legal fees, medical bills, lost wages, and even death benefits. Personal liability insurance for renters usually does not cover accidents involving motor vehicles (which are usually covered by auto insurance policies), claims related to professional activities (which should be covered by business insurance policies), or injuries involving two or more people living in the same dwelling.

It’s also worth noting that personal liability insurance does not cover any intentional bodily harm or property damage. Also, most policies will contain specific exclusions or exceptions. As such, you should make sure to familiarize yourself with the details of your coverage, so you know what kind of support you can expect if an accident should occur.

How Much Personal Liability Coverage Do I Need?
Typically, renters insurance policies include $100,000 of liability coverage, but some insurance companies will also offer $300,000 and $500,000 options. If your rental property includes high-risk features such as a pool or trampoline, if you own a pet, or if you frequently entertain guests, then it might be worth the extra investment to increase your liability coverage.

If you feel as though you need additional protection beyond just increasing your personal liability coverage, consider taking out a personal umbrella policy. The right umbrella policy extends coverage beyond what is normally included in personal liability insurance and can work together with other policies to increase your coverage limits.