Personal liability insurance protects your assets in the event that you (or a member of your household) accidentally injure another person or damage someone’s property.  It’s known as “: third-party insurance,” because it protects you if a third party files a claim against you. 

Liability insurance will pay for a legal defense in the event of a lawsuit, and pay medical and /or property claims for which you are found legally liable, up to the limits of the policy.  Personal liability insurance can be purchased as part of a package policy (such as homeowners, renters, or auto insurance), or as a separate policy (such as a personal umbrella liability).

Nationally, no one expects to be sued.  But a good personal liability policy can definitely help to protect both your family, and your future.

Learn More about Personal liability insurance protection….

As you can see below, our website offers additional information regarding personal liability insurance.  Browse any of the following topical links to learn more about this important type of insurance protection:

Personal Umbrella Policy

Personal umbrella liability insurance is designed to protect you against a catastrophic lawsuit or judgment. It provides expanded coverage and increases the amount of your liability protection beyond the basic coverage provided under your homeowners/renters and auto insurance policies.

Unlike other types of liability coverage, personal umbrella liability insurance can be purchased as a separate policy. However, your insurer will require that you have underlying basic liability coverage (homeowners/renters insurance, auto insurance, or both) before you can purchase an umbrella liability policy. If you are found to be legally responsible for injuring someone or damaging someone's property, the umbrella policy will either pay the part of the claim in excess of the limits of your basic liability coverage, or pay for certain losses not covered by your basic personal liability insurance.

Why do you need it?

Standard homeowner’s policies usually provide $100,000 to $300,000 worth of liability coverage. As well as the fact that most states now require you to carry auto insurance with minimum liability coverage (which varies from state to state). It is possible to purchase additional liability coverage under these policies, but amounts may be limited. In today's society, it's not unusual to hear of $1-million, $2-million, and even $10-million liability judgments against individuals. If someone is injured in your home, or if you cause a serious auto accident, you could be hit with such a judgment. Without a personal umbrella liability policy, anything beyond the liability coverage limits of your homeowners/renters or auto insurance policy will have to come out of your pockets.

How does it work?

Personal umbrella liability insurance supplements the basic liability coverage provided by your other insurance--it's designed to kick in when your other liability coverage is tapped out. Depending on the type of claim against you, your homeowners, renters, auto, or boat insurance coverage would be utilized first. Once the basic liability limit under the applicable policy is reached, your personal umbrella liability policy covers the remaining costs, up to the policy limits. For this reason, umbrella liability insurance usually carries a high deductible. Insurance companies typically require you to have homeowners/renters and auto liability insurance equal to the amount of your personal umbrella deductible.

What does it cover?

A typical personal umbrella liability policy provides the following protection, up to the coverage limits specified in the policy:

What doesn't it cover?

Personal umbrella liability insurance typically provides extremely broad coverage. Furthermore, if something is not expressly excluded from coverage, it is covered. Although exclusions can vary, the following are some items typically excluded from coverage:

How much should you buy?

There is no exact science when it comes to determining the appropriate level of personal liability insurance coverage. You might think that you only need enough liability insurance to protect your assets, but this figure is practically irrelevant when deciding how much liability coverage you need. A large judgment against you could easily wipe out your assets and put your future earnings in jeopardy. Instead, consider factors such as how often you have guests in your home, whether you operate a home-based business, how much you drive, whether you have teen drivers in your home, and whether your lifestyle gives the impression that you have "deep pockets."

Coverage limits vary, but a typical policy will provide $1 million to $10 million worth of liability coverage. Of course, as your coverage limit increases, the premium will also increase.

When should you get it?

Your homeowners, renters, and/or auto insurance policies include some liability coverage. So the question is, when should you consider purchasing additional liability coverage (typically in the form of a personal umbrella liability policy)? There is no hard-and-fast answer, but there's no time like the present because almost anyone can be the target of a huge liability lawsuit. Certain events increase your liability exposure--such as starting a home-based business, or having a teenaged child who gets his or her driver’s license--so you should definitely re-examine your liability coverage at these times.

While it is possible to be over insured, it's much more likely that you're underinsured for liability purposes. Don't learn the hard way that you need more liability insurance. Accidents and injuries don't happen on a schedule, and once you're the target of a liability suit it's too late to increase your coverage.

Amounts of Coverage

In today's litigious society, anyone can be the target of a potentially devastating lawsuit. It's important to consider the possibility that the basic coverage under your auto and homeowners policies might not be enough.

Why adequate liability coverage is important

Standard homeowners policies usually provide $100,000 to $300,000 worth of liability coverage. Most states require you to carry auto insurance with minimum liability coverage (which varies from state to state). It is possible to purchase additional liability coverage under these policies, but amounts may be limited. In today's society, it's not unusual to hear of $1-million, $2-million, and even $10-million liability judgments against individuals. If someone is injured in your home, or if you cause a serious auto accident, you could be hit with such a judgment. Without additional liability insurance, anything beyond the liability coverage limits of your homeowners/renters or auto insurance policy will have to come out of your pockets.

How to increase your personal liability coverage

The best way to make sure you have adequate liability coverage is to purchase a personal umbrella liability policy (sometimes called an excess liability policy). This coverage works in conjunction with the basic liability coverage provided by your auto insurance and homeowners/renters insurance. A personal umbrella liability policy increases your level of liability protection by providing expanded coverage beyond the basic coverage under your homeowners/renters and auto insurance policies.

If you don't own a house, rent an apartment, or own a car, you have no reason to purchase homeowners, renters, or auto insurance. Thus, you don't have the basic liability coverage provided by these types of insurance. You also can't purchase a personal umbrella policy, because this type of insurance is designed to supplement the basic coverage provided by auto, homeowners, and renters insurance. However, you can still get liability coverage by purchasing a comprehensive liability policy. Like personal umbrella policies, comprehensive liability insurance provides protection against liability claims, including legal and medical costs. But unlike personal umbrella liability policies, comprehensive liability insurance stands alone.

So, how much is enough?

There is no exact science when it comes to determining the appropriate level of personal liability insurance coverage. You might think that you only need enough liability insurance to protect your assets, but this figure is practically irrelevant when deciding how much liability coverage you need. A large judgment against you could easily wipe out your assets and put your future earnings in jeopardy. Instead, consider factors such as the following:

Personal umbrella liability policies are typically available in coverage amounts ranging from $1 million to $10 million. The amount of coverage you should have depends on the factors mentioned above, as well as your risk tolerance and your financial ability to weather a liability judgment.