How to buy home insurance – part 5

Personal Liability Insurance

A friend of mine and his family were out of the house one day.  His mother in law arrived at their home when no one was there.  She walked to the back of the house.  The family pet, a 100 plus pound lab, came over to have his ears scratched.  A ball was in the dog’s mouth.  The mother in law took the ball and threw it not realizing the lab, which was on a tether, had wrapped the cord around her ankles.

The mother in law was jerked off her feet and fell on the driveway breaking her hip and shoulder while also suffering a concussion.  She had to have surgery and was in the hospital for over a week.  She also had to have months of physical rehabilitation to regain full use of her shoulder as well as to be able to walk properly.

The mother in law did not have health insurance when this took place.  Almost as tragic, he only had $100,000 in personal liability coverage on his home insurance policy.  The mother in law had to sue her daughter and son in law to access that coverage.  She won, and while her daughter and son in law understood why, it’s still a little weird.

Had my friend had a little more personal liability coverage on his home policy, it would have taken care of all her medical bills.  The cost to add additional coverage to their home owner’s policy would have been about $20 a year more.  Much less than what they ended up paying personally to help her out with the medical bills.

Personal liability insurance is designed to protect the homeowner when,

  • Someone comes onto the property invited or not
  • Gets hurt (usually physically)
  • And sues the homeowner for negligence

Coverage amounts for most homeowner’s policies typically are,

  • $100,000
  • $300,000
  • $500,000
  • And some insurance companies offer $1,000,000

The difference between each level varies by insurance carrier, but typically runs about $20 a year per level.  That said, even the cost for $500,000 in coverage is still less than the cost of an attorney for 1 hour.

How much coverage do you need?

  • I typically recommend a homeowner start with $300,000 of personal liability coverage
  • If they have a pool, dog or trampoline, I recommend $500,000 in coverage
  • If they homeowner is a lawyer, doctor, business owner, etc. and/or the homeowner has a household income of more than $150,000 or investments above that amount, I recommend $500,000 and an umbrella policy

By the way, if you rent an apartment or a home, this coverage is available on a renter’s policy too!  Protecting you and your family financially is just as important as protecting your home.

Have you ever had someone make a claim on your liability coverage?  Share your comments, questions or experience with us on our Facebook page at or in our comments section.

Evie Wise
Evie Wise


Evie Wise
Evie Wise

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