What Is Personal Liability Insurance for Renters and How Does it Work?
Personal liability insurance for renters is a section of your renters insurance coverage that protects you against costs related to lawsuits. If a third party such as a guest at your home sues you for bodily injury or personal property damage, personal liability insurance for renters can help reimburse you for legal expenses, including attorney, court, and settlement fees. Many standard renters insurance policies include $100,000 in personal liability insurance coverage, but you can work with an independent insurance agent to increase this limit if you wish.
So what is personal liability insurance for renters' main purpose? To protect renters from paying hefty lawsuit expenses. Renters liability insurance only covers your personal liability and related costs, it doesn't protect your personal property. That's what the contents coverage section of a renters insurance policy is for. Let's take a closer look at the personal liability insurance section of renters insurance for now.
Who Needs Renters Liability Insurance?
Though renters insurance isn't mandated by state law, it's often required by most landlords before you can sign a lease. All renters really need to have liability insurance to protect them against unexpected lawsuits that can be filed by any third party, including friends and other guests, workers, and even delivery people. If someone so much as trips and hurts themselves on your property, they can sue you. That's what makes having renters liability insurance coverage critical.
What Does Personal Liability Insurance Cover for Renters?
The personal liability coverage in renters insurance covers legal expenses if you get sued by a third party. Renters insurance personal liability coverage can reimburse a tenant for the costs of an attorney, courtroom fees, and settlement fees if they lose their case and are ordered to pay a settlement.
The personal liability coverage under renters insurance can also cover these specific incidents:
- Pet-related injuries: These can include dog bites, bad cat scratches, and more.
- Slip & fall injuries: If a worker or any other third party slips on your icy sidewalk or otherwise falls for any reason on your property.
- Outdoor liabilities: These can include swimming pools, trampolines, zip lines, and other "attractive nuisances," as insurance companies call them.
- Damage to other people’s property: This applies to any incident of a third party having their personal property damaged at your home, such as if they trip over something that's on the floor and drop their laptop, cracking the screen.
- Falling trees: A tree falling on your property could easily cause injury or personal property damage to a third party, such as if it crushes someone's foot as they're walking out to their car.
- Liability related to social events: For instance, if you host a party at your home and a fight breaks out, leading to a black eye or worse for one or more of your guests who require medical attention.
- Fires: Such as if a fire starts in your microwave and burns a friend or other guest's hand or damages their property in some way.
- Injured workers: If you hire a worker to fix your TV but they trip on your staircase and break their ankle, they could sue you for it.
Any third party could file a lawsuit against you for these incidents and many more. That's where your renters insurance's personal liability coverage would kick in to help reimburse you for legal expenses, up to your policy's limits.
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What Doesn’t Personal Liability Insurance Cover for Renters?
The personal liability coverage under your renters insurance won't cover damage to or theft/destruction of your personal property or "contents." So if someone steals or breaks your TV, that would be covered under the personal property or contents section of your renters insurance policy, not the personal liability portion.
Personal liability insurance for renters also won't cover the following:
- Injuries in common areas: Your landlord is responsible for incidents that take place in common areas, such as in the leasing office or around the complex's pool. Such incidents would be included under their landlord insurance policy.
- Car accidents: Car accidents and other incidents involving your vehicle are covered under your car insurance policy, not your renters insurance.
- Damage to your belongings: Damage to your personal property isn't covered by the liability part of your renters insurance, but your broken, stolen, or damaged property is included in your contents coverage.
- Business liability: Often, renters insurance won't cover business-related liability incidents, only personal liability claims. So even if you run a home office, you'd need a business insurance policy's liability coverage for any lawsuits related to your business.
- Intentional acts: Insurance companies never cover intentional or malicious acts under liability coverage. So if you got mad at a friend or other guest and decided to push them down the stairs and they broke their arm, your renters insurance wouldn't reimburse you for legal expenses if you got sued.
Your independent insurance agent can further explain what's not covered by your renters insurance policy in general, and specifically by your personal liability coverage section.
How Much Personal Liability Renters Insurance Do I Need?
Standard renters insurance policies typically come with limits of $100,000 of personal liability coverage included. Though this amount may seem like plenty, depending on the circumstances of your home, it might not be enough for you. If you own a pet of a stereotypically aggressive dog breed or invite guests over to use a trampoline, for example, your risk of third-party injury or property damage is much higher. So are the potential lawsuit costs you could face.
Many renters insurance policies come with options to increase your personal liability coverage to a limit of $300,000 or $500,000. If you're unsure of how much coverage is right for you, your independent insurance agent can help you decide by evaluating some factors about your home and lifestyle.
What Is the Difference Between Renters Insurance and Personal Liability?
While renters insurance refers to a type of insurance policy, personal liability refers to a type of coverage included in that policy. Renters insurance vs. personal liability insurance can be much easier to understand when you break the two down side by side, as follows.
Personal Liability Insurance vs. Renters Insurance
|Personal Liability Coverage
|One type of coverage in a larger policy
|A complete insurance policy
|Covers only your personal liability
|Covers your personal liability, damage to your personal property, and additional living expenses
|Comes with one coverage limit, often $100,000
|Comes with three different limits for personal liability, personal property or contents, and additional living expenses
Frequently Asked Questions about Renters Personal Liability Insurance
Many tenants believe that their landlord’s insurance will cover the costs of liability claims and lawsuits, but this isn't always the case. Landlords are only held responsible if the injury or property damage resulted from their failure to properly maintain their property.
For example, if a guest falls on your wet kitchen floor, you may be held liable, whereas if someone falls down the stairs because of a loose footboard that your landlord has failed to repair, your landlord will most likely be held responsible.
While those who live in apartments are generally not responsible for keeping outdoor walkways clean and clear, renters in single-family dwellings often are. Check your lease if you are unsure where the responsibility lies.
A visitor’s health insurance may cover the costs of medical expenses after an injury in your rental home, or they may not. If a guest injured in your home is uninsured, or if that person’s health insurance co-pays and deductibles are very high, you may be required to cover their out-of-pocket costs.
If the injured guest subsequently has unpaid days off work as a result of the injury, you may be responsible for restitution for lost wages.
Finally, if the injuries are severe and the injured party can prove willful negligence on your part, you may be responsible for punitive damages as well. In each of these cases, your rental liability insurance can cover some or all of these costs.
Nearly all renters liability policies include compensation for court costs and legal fees associated with a liability lawsuit. Your renters liability insurance may not cover you if you willfully cause injury or damage.
Be sure to check the details of the policy or ask an agent for clarification to fully understand what your coverage includes.
Many people who have not built up significant personal wealth feel that liability insurance is unnecessary. However, it's important to know that in a serious legal claim, attorneys can go after assets you don't even have.
For example, even if you have to file for bankruptcy, you may still be required to pay restitution. If you get sued and don’t have the protection of liability coverage, your credit can be ruined, and your wages could be garnished for years to come. Renters insurance is an inexpensive way to prevent such an expensive possibility.
If your court costs, legal fees, and a judgment against you exceed the coverage offered by your renters liability insurance policy, you'd be responsible for paying the excess costs out of pocket. This is possible if a severe injury to a guest in your apartment requires extensive and ongoing medical treatment.
Homeowners insurance policies generally have a minimum limit of $100,000, with higher amounts of coverage available at additional cost. Most insurance professionals recommend purchasing the highest level of liability insurance offered. It won't cost you a lot more money but will provide you with much more protection.
You also have the option to buy a personal umbrella insurance policy. This kind of policy kicks in when your main insurance policies (e.g., renters insurance and auto insurance) exceed the maximum coverage. You'll then be protected to a much higher degree, with liability coverage limits in increments of $1 million.