Home Insurance and Personal Liability Coverage

What is personal liability home insurance?

Personal liability home insurance is a part of every standard home insurance policy. It protects you if you’re found liable or personally responsible for someone’s injury on your property or damage caused to someone else’s property. The coverage includes any legal expenses you may incur as well as medical bills and property repairs or replacement. Personal liability is also included in tenant and condo insurance policies.

It's worth noting that personal liability is only one component of broader liability coverage. The other two components include:

• Voluntary medical payments: This covers medical expenses for up to a year if someone gets injured on your property, but you are not found liable for the injury.
• Voluntary property damage: This covers your expenses if you’ve accidentally damaged someone else’s property and were not found liable for the damage.

The ‘voluntary’ part is crucial, since you’re not legally obligated to cover either of these two expenses. Personal liability coverage, on the other hand, would cover both if you’re legally obligated to pay them (in addition to any legal expenses).

Who is personal liability home insurance for?

Personal liability home insurance is meant for anyone who owns or rents a property. This coverage is especially useful for people who host a lot of social gatherings at their home. The more people you have over at your home, the higher the likelihood of someone suffering an injury. This is even more true if you have pets or high-risk properties like a hot tub or swimming pool.

Imagine this... You’re hosting a party at your home. Someone slips and falls while trying to enter your swimming pool and hits their head on the tiles. They proceed to sue you for the injuries sustained on your property.

Without liability coverage, you could be looking at bills amounting to hundreds of thousands of dollars (if not millions). Accidents like that can happen out of the blue when you least expect them. By that point, if you’re insured, you’d have to make all the payments yourself. It’s better to be prepared in advance.

What does personal liability home insurance cover?

Personal liability home insurance covers a wide range of liability scenarios. Typically, those scenarios have to involve you (or anyone listed on your policy, like your spouse or dependents) and/or your property. For instance, if you or anyone on your policy accidentally damage a third party’s property while visiting it, or if a third party hurts themselves while visiting your property, then expect personal liability to come into effect.

Here’s what you should expect to get covered:

• Court costs
• Legal fees
• Medical expenses
• Property damage settlements

If you are requested to cover any of these costs, filing a claim will do the trick – up to the limits on your policy.

Potential scenarios

Here are a few more examples of potential scenarios when your liability insurance could come in handy:

• Black ice on your driveway causes a delivery person to slip and fall, resulting in their leg being broken.
• Your dog bites a visitor on your property, necessitating stitches.
• Your child breaks an expensive piece of furniture while playing inside someone else’s home.
• You knock a third party’s tooth out while playing baseball on your or their property, necessitating dental implants.
• A tree on your property collapses and damages a piece of your neighbour’s home.

What’s not covered by personal liability home insurance?

Your liability insurance will not cover everything, of course. Here’s what it won’t cover:

• Non-liability situations: It’s called personal ‘liability’ insurance for a reason. A situation has to have a liability component to it in order to be coverable. Not all situations are like that. For instance, if you or another household member (i.e., not a third party) injures themselves on your property or damages a part of your property, liability coverage will not apply. Medical bills, replacement costs and other expenses related to the incident would all, unfortunately, fall on you in this scenario.
• Business-related affairs: If a third party gets hurt or their property gets damaged because of mistakes or accidents caused by your business activities, your personal liability home insurance would not protect you. For instance, if someone comes over for a physical training session on your property, an injury sustained because of this activity would not be covered (even if the property is your primary place of residence). For that, you would need to purchase business insurance – specifically, either general liability or professional liability coverage.
• Intentional injury or damage: If you intentionally damage a third party’s property or intentionally injure them, your insurer would not compensate you. They won’t cover replacement costs, medical bills or any associated legal fees. It would all fall on you, since insurance never covers intentional damage or injury of any kind.
• Auto-related liability: If a liability issue arises due to a vehicular situation (e.g., you’re an at-fault driver who causes bodily injury to a third party), your personal liability home insurance would not protect you, since that would fall under auto insurance – third-party liability coverage, to be exact (and the same is true the other way around). If you don’t have a home and auto insurance bundle under the same provider, be sure to file your claim with the correct insurer (or bundle up instead to make things more convenient).