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What Is Personal Liability Renters Insurance?

What Is Personal Liability Renters Insurance
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updated: July 4, 2024
edited by Julia Kagan

Personal liability coverage is part of a standard renters insurance policy. It’s designed to protect you financially if you’re responsible for injuring someone or damaging their property.

What does personal liability renters insurance cover?

Personal liability renters insurance is a part of your overall renters insurance policy, which covers your personal property. It protects you when someone from your household causes injury or property damage to another person.

Here are some scenarios that might involve personal liability renters insurance:

  • You host a party in your rented home. A guest slips in your bathroom, hits her head on the edge of the tub, and is rushed to the hospital.
  • While visiting the home of an acquaintance, you accidentally knock over and break an expensive porcelain vase.
  • Your rambunctious five-year-old dumps a milkshake on a new laptop on display in an electronics store, destroying it.
  • Your Top Chef-inspired flambé gets out of control. There’s a minor fire in your apartment and significant smoke damage to a neighboring unit.
  • Your dog gets loose, runs down the street, and bites a pedestrian. The injury requires medical care.

In these examples, you could be held liable for costs related to injuries or damaged property. That means being on the hook for things like medical and rehabilitation bills, lost wages, and charges to repair or replace damaged or destroyed items. You may also face legal action.

This is where personal liability coverage comes to the rescue. Your insurer picks up the costs, subject to your personal liability coverage limit.

What is a personal liability coverage limit?

Coverage limit is an important concept in property and casualty insurance. It’s the maximum amount the insurer will pay if you have a claim. If your liability exceeds this limit, you’ll have to make up the difference yourself. Personal liability limits are an important consideration when you’re shopping for a renters insurance policy.

When you purchase an insurance policy, you can choose limits for certain coverages. Opting for a higher limit provides you with more financial protection, but the cost of your premium is higher.

When you buy a renters insurance policy, you'll have to decide how much personal liability coverage you need. For example, insurer Progressive notes that personal liability coverage limits of $100,000, $300,000, and $500,000 are common options. Choose a limit that equals or exceeds the value of your net worth, which is your total assets (money in the bank, household items, collectibles, art, jewelry, investments, automobiles, real estate, etc.) minus your liabilities (debt).

Note: If your asset value exceeds the maximum available with your policy, consider buying umbrella insurance. This additional policy can increase your liability limit to $1 million and beyond at a relatively low cost.

Personal liability coverage in action

Let’s return to our earlier examples to illustrate how personal liability coverage works. Assume you’ve chosen a $300,000 liability limit for your renters insurance personal liability coverage.

Example 1: Guest slips and falls

The injured person sues you for medical expenses, lost wages, and pain and suffering. The judge awards $500,000 to the injured guest. Your insurer pays only $300,000—the amount of your coverage limit. You need to come up with the remaining $200,000. You’ll also have to pay your legal fees because you didn't purchase enough coverage.

Example 2: Milkshake meets computer

The store manager, himself a parent, is sympathetic. Nevertheless, it’s corporate policy to hold you responsible for the $2,000 computer. The good news is that the $300,000 liability limit on your renters policy is easily enough for the insurer to cover that cost.

Example 3: Dog bites man

The injured party incurs nearly $70,000 in medical bills, for which you’re responsible. Your personal liability coverage limit of $300,000 should be adequate to cover these costs.

These examples illustrate the types of incidents and expenses covered by personal liability renters insurance. However, coverage varies among insurers and plans.

Be sure to check your renters insurance policy contract to understand exactly what is and isn’t covered. And if you have any questions about your policy, contact your agent or the company directly.

What is not covered by renters liability insurance?

While renters liability insurance is valuable, it doesn’t apply in every situation. Here are some personal liability coverage exclusions.

Damage to your own belongings

Liability insurance doesn’t cover damage to your own belongings, but your renters insurance policy’s personal property coverage does.

Injuries to you or members of your household

Any medical bills related to injuries you suffer should be covered by your own health insurance.

Injuries in common areas

Injuries occurring in a property’s common areas will likely be covered by the landlord’s insurance.

Incidents related to your business

If you’re self-employed, your business is responsible if someone is injured or their property is damaged due to your business's actions. Your business liability insurance should cover the incident.

Vehicular incidents

Your auto insurance policy, not your renter's insurance, covers injury or property damage from a vehicle accident.

Some pet incidents

Many insurance companies have exceptions for certain dog breeds—those traditionally known for more aggressive behavior. For example, your policy may require installing a chain-link fence around your yard. Some insurers refuse to cover these breeds altogether. So, if you own a dog, read your policy’s contract carefully. And note that some insurers, including State Farm, do not consider breed at all when providing homeowners or renters liability coverage.

Intentional damage or injury

Damage or injuries that you cause intentionally are not generally covered.

How much does personal liability renters insurance cost?

Personal liability coverage is part of a standard renters insurance policy. You may be surprised at how affordable renters insurance can be. According to a recent study by USA Today, the average annual cost of a $15,000 policy is $173 per year. That’s about $14 monthly or less than 50 cents per day.

The cost of renters insurance will vary by state and insurer. So be sure to compare quotes from several providers to get the best price for the coverage you need.

Renters insurance vs. tenants liability insurance vs. personal liability insurance

While the term “renters insurance” is more commonly used, you may also see the term “tenant’s insurance.” However, both terms mean the same thing: a type of insurance policy designed for those who rent their homes.

A renters insurance policy (or tenant’s insurance policy, if you prefer) typically has four types of coverage:

  • Personal property: Coverage for your personal belongings, such as furniture, clothing, appliances, electronics, hobby gear, etc.
  • Personal liability: Coverage if you’re held responsible for someone’s injury or property damage.
  • Additional living expense: Coverage for costs you may incur (such as a hotel room and restaurant meals) if your rented home is temporarily unlivable due to damage from a fire, storm, or other incident.
  • Medical payments: Coverage for the treatment of injuries sustained by others visiting your rented home; applies regardless of who is at fault.

TIME Stamp: Personal liability renters insurance is affordable financial protection

Personal liability coverage is part of a standard renters insurance policy. It provides financial protection if you’re held responsible for another’s injury or property damage. It’s relatively affordable and helps you avoid paying large sums out of pocket to make someone “whole” again.

Frequently asked questions (FAQs)

Does my landlord’s insurance policy protect me?

As a renter, you’re not protected by your landlord’s insurance. A landlord’s insurance policy protects the property owned by the landlord—the main structure of the building, any permanently installed appliances and fixtures, and common areas.

It does not provide coverage for your personal property or liabilities. That’s where your renters insurance policy takes over.

Is personal liability insurance the same as renters insurance?

Personal liability insurance is part of a renters insurance policy. It provides financial protection if you’re held responsible for someone’s injury or property damage.

Should I have more personal liability coverage if I have a pet?

Personal liability coverage is essential if you have a pet—as you’re responsible for anything the pet does, including any injuries or property damage.

Note that the average cost of a dog bite claim was $58,545 in 2023, according to the Insurance Information Institute. Dog bites are typically covered by personal liability renters insurance but check with your insurer to understand any rules it might have regarding your dog’s breed.

Does personal liability renters insurance have a deductible?

No, personal liability renters insurance typically does not have a deductible.

What is renters insurance?

Renters insurance is a policy tailored to tenants' needs. It provides coverage for personal belongings and protects finances if you’re held responsible for someone’s injuries or property damage.

Which company has the best renters insurance?

The best renters insurance companies provide the coverage you need at a price that works for your budget (though renters insurance is quite affordable for most people).

An independent insurance agent, who represents multiple companies, can help you understand your options. Note that the cheapest renters insurance may not always be the right policy for you. You can also check out our reviews of cheap renters insurance companies.

The information presented here is created independently from the TIME editorial staff. To learn more, see our About page.

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