Homeowners insurance protects the dwelling, your belongings, and offers liability coverage for injuries that happen on your property. There are three components to homeowners insurance: dwelling coverage, personal property coverage, and personal liability coverage.
What is personal liability insurance
If the dog bites a guest, the mailman slips on your walkway, or someone is injured using your swimming pool, personal liability insurance protects you.
Homeowners insurance offers homeowners personal liability protection if someone is injured at your property or sues for damages. Some carriers offer identity theft and cyber liability as part of their personal liability coverage or as an add-on rider.
There are limits to standard personal liability coverage depending on your policy and insurance carrier. According to Allstate, basic personal liability homeowners policies typically have a $100,000 coverage limit.
| Coverage | Included with Homeowners Insurance |
| Dwelling/Structure | Yes |
| Personal liability | Yes |
| Personal belongings | Yes |
| Loss of Use (additional living expenses) | Yes |
| High-end electronics/special jewelry | Limited, requires add-on* |
| Equipment breakdown | Yes* |
| Electrical outage | Yes* |
| Service lines | Yes* |
| Cyber liability | Yes* |
| Water damage | Yes |
| Flood | No** |
| Wind or hail | Yes, but not high winds*** |
| Earthquakes | No* |
| Pets | Yes* |
*Available as add-on coverage if not part of policy
**Flood insurance is available through the NFIP and approved insurers
***If you live in hurricane or tornado areas, additional windstorm rider may be required
Increase your personal liability coverage if you have a pool or pet
Having certain items — like a pool or trampoline — can increase your liability as a homeowner.
“A pool is considered an ‘attractive nuisance’ and will increase your liability risk,” according to the Insurance Information Institute (III). The Institute recommends increasing your liability coverage to “at least $300,000-$500,000” if you have a swimming pool.
Similar to swimming pools, some homeowner insurance carriers consider trampolines an “attractive nuisance” and exclude them in policies. Other carriers have specific language for trampolines, requiring netting or that they are anchored to the ground depending on your state, according to Steve Wilson, senior underwriting manager at Hippo Insurance.
Also, exotic pets and certain dog breeds are excluded from some homeowners insurance policies. Some homeowners insurance companies will not offer coverage based on the size and breed of the dog, especially large dogs and breeds considered to be aggressive.
According to Wise Insurance Group, most insurers consider a pet to be exotic if:
1. A permit is required to buy the pet
2. You need to modify your home or yard to contain the pet
3. The pet is a hybrid of a domesticated and non-domesticated animal (like wolf and cat hybrids)
4. The animal is found naturally in the wild
Pet liability coverage is not pet insurance. Pet insurance is a health plan for your pet. Pet liability covers damage or injury your pet causes to someone.
Consider an umbrella policy for extra liability coverage
An umbrella policy is additional liability coverage that’s available as an add-on rider to your homeowners or renters insurance. Umbrella coverage kicks in after you have used up your personal liability coverage limit.
Another option if you have a restricted breed and cannot get an umbrella policy to cover your pet is canine liability insurance. Canine liability insurance offers coverage if your dog bites or attacks someone. It’s a separate policy that is helpful if your homeowners insurance doesn’t offer coverage for your breed.
If you have an exotic pet, X-Insurance offers exotic pet liability insurance.
How much is personal liability insurance for homeowners
The average annual homeowners insurance premium in the United States in 2017 was $1,211, according to the National Association of Insurance Commissioners (NAIC).
As previously mentioned, the standard homeowners personal liability coverage is $100,000. The cost to increase your personal liability coverage amounts depends on your home and location, but is relatively inexpensive.
A million-dollar umbrella policy costs between $150 and $300 a year, according to the Insurance Information Institute. However, the Institute notes that most carriers require homeowners to have at least $300,000 in personal liability coverage before selling them an umbrella policy.
Ronda is an attorney, writer, and entrepreneur. She is a contributing writer for the Huffington Post. Originally from Chicago, she has lived in Los Angeles and New York. She loves to travel and is passionate about education equity, especially for first generation college students.