What does homeowners liability insurance cover?

Homeowners liability insurance covers legal and medical costs if you are responsible for injuring someone or damaging their property. It may cover you against lawsuits for bodily injury or property damage that you or family members accidentally cause to other people. It may also pay for injury or damage caused by your pets.

What is homeowners liability insurance?

Homeowners liability insurance is one of the essential coverages provided by a typical home insurance policy. It typically includes bodily injury, property damage, legal defense fees and incidents caused by household members or pets—both on and off your property. Also known as Coverage E, personal liability insurance provides you with valuable financial protection.

When does liability insurance apply?

For homeowners liability insurance to apply, you must be found responsible, negligent or at fault for the bodily injury or property damage that occurred.

For example, if a tree on your property falls and damages your neighbor’s roof, your liability insurance will only cover damage if you are found responsible. It would have to be proven that you knew the tree was dead or dying and could cause damage to your neighbor’s property. Otherwise, the cost of repairs would be covered under your neighbor’s home insurance policy.

How do I choose the right liability coverage limits?

Generally speaking, personal liability coverage limits start at about $100,000. If you have significant assets, you may want additional coverage. You can increase your personal liability limit and also get broader coverage by purchasing an umbrella policy from your insurer.

Your umbrella policy will kick in once the standard liability limit on your home insurance policy is used up during a claim. Your insurance carrier or agent can help you decide if an umbrella policy is right for you.

Other standard home insurance coverages

In addition to personal liability, a standard home insurance policy also includes coverages such as dwelling coverage, other structures, personal property, loss of use and medical payments.

What’s the difference between liability and medical payments coverage?

Liability insurance covers injuries or damage that you cause to others when you are legally responsible. Medical payments coverage, also known as Coverage F, pays for medical bills whether or not you are responsible.

Personal liability and medical payments are both considered third-party coverages, because they cover you when someone makes a claim against you.

What does liability insurance cover?

Homeowners liability insurance may cover incidents such as:

Injuries on your property

Personal liability covers you if a guest accidentally injures themselves on your property and you’re found responsible. You could be covered for the guest’s medical expenses, lost wages, and pain and suffering.

Injuries away from your property

Liability coverage may also apply away from your home, assuming you’re found legally liable. For example, let’s say you or a family member accidentally injures someone in the park. Your homeowners liability insurance can help cover the person’s medical bills, as well as pay for legal costs if you’re sued.

Property damage caused by someone in your household

If you or a family member accidentally damages someone else’s property, liability insurance can help cover damages. For example, if your child breaks a neighbor’s window while playing baseball, personal liability can help pay to repair or replace the damage up to your policy limit.

Injuries caused by your pet

When it comes to dog bites and other incidents involving pets, most states apply the concept of strict liability. This means that the pet owner is responsible under most circumstances. For example, if a dog bites another person and injures them, the dog's owner will be liable for the injuries. Fortunately, homeowners liability insurance helps pay for medical bills if your pet causes an injury to another person.

Please note that certain dog breeds or dogs with a history of aggressive behavior may be excluded from liability coverage.

Real-life examples of liability claims

Let’s look at some more examples of when homeowners liability insurance may offer you financial protection. All of these examples assume that you, as the homeowner, were found responsible for the incident.

Incident	What Liability Insurance May Help Cover
You accidentally ruin a neighbor’s expensive rug.	Replacing the rug
You failed to shovel after a snowstorm, causing a guest to slip and fall. Their injury prevents them from working.	Medical bills, lost wages, pain and suffering
Your mail carrier trips over a loose stair tread, falls down and sues you.	Lawsuit settlements, legal bills, pain and suffering
Your dog knocks someone to the ground at a park.	Medical bills, pain and suffering
Your child accidentally injures another child on the playground.	Medical bills, pain and suffering

What is not covered by liability insurance?

Homeowners liability insurance may not cover incidents such as:

Injuries to people within your household
Personal liability doesn’t cover costs related to your own injuries, or the injuries of others in your household. Let’s say you cut your hand preparing dinner. In that case, your health insurer would cover the medical bills, not your homeowners liability insurance.
Business-related incidents
Homeowners liability insurance does not cover problems that arise out of business activities, such as a person accidentally injuring themselves while visiting your business. To be covered, you would need general liability insurance, which is a form of small business insurance.
Auto accidents
As you might expect, homeowners liability insurance does not cover vehicle-related injuries that you cause to other people. That falls under the liability portion of your auto insurance policy.
Intentional or criminal acts
If you or someone in your household intentionally injures someone or damages their property, your homeowners insurance liability will not help cover damage and the associated costs. The same rule applies for criminal acts.

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