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What is liability renters insurance?
As a new renter, I’m curious about what's covered under my insurance. I generally understand that it covers property, but what about other potential problems? I've heard the term "personal liability coverage," but I'm not sure what that means. Is that also covered under a standard renters insurance policy?
Renters insurance generally provides two types of coverage: personal property and personal liability. Property is the more self-explanatory coverage and isn't the subject of this article. Instead, we're going to talk about the more confusing of the two: liability coverage.
Whether it's called liability coverage or personal liability coverage, it means the same thing. It's the coverage your policy provides if someone brings a claim or lawsuit against you.
Typically, this coverage matters when you might be liable for non-auto-related damages, either personal injury- or property-related. Here are some examples where personal liability coverage applies:
- A guest slips and falls in your home
- Your child hits a baseball through your neighbor's window
- You accidentally leave a candle burning and start a small fire in your home
Keep in mind that personal liability coverage is relevant when you're held liable (i.e. responsible) for the damage, whether to a person or property. The general process is that if there's property damage or an injury, the victim first files a claim with your insurer.
If your insurer determines you aren't liable, you'll only have to deal with the problem further if the victim decides to take the claim to court to fight the insurer's denial.
With liability coverage, you won't owe anything for the litigation costs or other damages, regardless of whether or not you lose the case. The only way you'll owe anything is if the total costs exceed the policy limit.
What does liability renters insurance cover?
As I briefly mentioned above, your renters insurance liability coverage takes care of damages and litigation costs when you're held liable for property damage or an injury.
Of course, coverage is only up to your policy limit. A standard renters insurance policy has a liability limit of approximately $100,000, and you can always pay for additional coverage if necessary.
Some examples of claims that would be covered if you're liable include:
- Pet-related injuries, such as dog bites
- Slip-and-fall injuries
- Outdoor liabilities, such as swimming pools and trampolines (accidental death and/or injury)
- Property-related liabilities, such as rotting trees adjacent to property lines
These are just a few examples of claims that fall under your general liability coverage. If you have questions about what else might be covered, you can speak with your independent insurance agent to learn more.
When am I not protected by liability renters insurance?
You aren't protected by liability renters insurance in a number of scenarios, such as:
- Auto-related damages (these damages will be covered by your auto insurance if they're covered at all)
- Business-related damages if you're operating a home business out of your residence
- Accidents arising from those who live under the same roof
These situations are generally self-explanatory, as coverage for the incidents falls squarely within other insurance policies. As always, if you're confused whether something is covered, it's best to speak with your independent insurance agent.
How much liability renters insurance do I need?
There isn't a correct answer to this question. The idea is that your policy limit should cover the cost of potential medical bills and litigation fees should there be an incident. Of course, that can be difficult to measure. You never know what could go wrong.
That being said, most standard renters insurance policies come with a $100,000 policy liability limit. The greater the risk, the greater the coverage you need. For example, if you have a pet that is prone to biting, you may want more coverage.
Likewise, if you have a swimming pool or trampoline, you may want more coverage. All of these factors are things you can discuss in greater detail with your independent insurance agent when it comes time to select a policy.