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Home Insurance Coverage E: What Is Liability Coverage?

By Jarrod Heil

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Personal liability coverage within your home insurance policy can be there to bail you and your family out on many occasions. The thing about liability coverage is that many people don’t think they need it until they actually have to use it. Then they’re always glad it’s a perk of their policy.

What Is Liability Coverage?

Personal liability coverage, or Coverage E within your home insurance policy, protects you and your family by providing a set amount of money to pay for lawsuits that derive from injuries that occur on your property, damage that you or your family cause to someone else’s property or belongings, and dog bites. It can also help cover medical expenses that result in an injury directly caused on your property for which you’re found liable.

Standard home insurance policies typically come with a minimum of $100,000 in liability coverage. However, many policies offer up to $1 million in protection. That amount applies to a single claim filed, so you may be covered for more or less depending on your situation.

If you have $100,000 in liability protection and your dog bites a neighbor, resulting in a lawsuit with $40,000 in court costs and settlement fees, your home insurance would cover the expenses. If, two weeks later, a friend comes over and breaks their legs jumping on your trampoline, resulting in $70,000 in court costs and settlement fees, your insurance would pick up the tab as well. Since the two incidents are separate and each fall below the $100,000 threshold, you’re covered.

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How Much Liability Coverage Do I Need?

Many people can settle for a comfortable $100,000 in liability coverage and be OK. However, there are many instances when it’s smart to up your liability coverage to more than $100,000.

If you have a pool, you should opt for higher coverage due to the many tangible dangers that come with pools. If somebody happens to drown in your pool and you’re found liable, a lawsuit and damages could easily total more than $1 million, which would come out of your own pocket if you’re not covered.

If you have a dog, you may want to get $500,000 in coverage just in case they bite someone. Check out more information on certain dog breeds home insurance companies may find to be riskier than others.

To find out more about the other forms of coverage within your home insurance policy, check out the following articles:

The editorial content on Clovered’s website is meant to be informational material and should not be considered legal advice.