What is Coverage L (Personal Liability) on a Homeowners Insurance Policy?

If you own a home, coverage L on your homeowners insurance policy provides protection against liability claims. This covers legal costs and damages if someone is injured or their property is damaged on your property.

Below is an in-depth look at what personal liability coverage is, what it protects against, coverage limits, and how it differs from coverage M for medical payments.

Overview of Coverage L (Personal Liability)

  • Coverage L on homeowners insurance provides liability protection if someone is injured or their property is damaged on your property.

  • It covers legal costs to defend you, and pays damages you are found responsible for up to your coverage limits.

  • Standard policies provide a minimum of $100,000 in liability coverage, but higher limits can be purchased. Umbrella policies add extra coverage.

  • Liability insurance follows you almost everywhere, excluding auto accidents. Activities like your dog biting someone or your child injuring another child would be covered.

  • It’s one of the most important coverages on a homeowners policy to protect your assets from lawsuits.

What Does Personal Liability Insurance Cover?

Personal liability, also known as coverage L, is part of the standard homeowners insurance policy. This coverage protects you when someone is accidentally injured on your property, or if they suffer property damage.

Some examples of liability claims covered include:

  • A guest slips and falls on your front steps and suffers an injury.

  • Your dog gets loose and bites a neighbor, child, or other pedestrian.

  • Your child is playing and accidentally breaks a neighbor’s window with a ball.

  • A tree on your property falls during a storm and damages your neighbor’s roof and car.

  • Someone is injured using your pool, trampoline, or other recreational equipment.

  • Damage is caused by a fire that started on your property.

In these situations, coverage L would pay for legal defense costs if you are sued, as well as any damages awarded up to your coverage limits.

Some key points about homeowners liability insurance:

  • It covers bodily injury and property damage claims.

  • Follows you almost everywhere, except for auto accidents.

  • Covers family members and pets living with you.

  • Applies to incidents occurring on or off your property.

  • Provides lawyers to defend you if you are sued.

Without liability coverage, you’d have to pay legal fees and damages out of pocket. This could easily exceed tens or hundreds of thousands of dollars if someone suffers severe injuries.

Personal Liability Policy Limits

A standard homeowners insurance policy provides a minimum of $100,000 in personal liability coverage. However, experts recommend considering higher limits to better protect your assets.

Reasons to consider extra liability coverage:

  • Medical costs for severe injuries can exceed $100,000 quickly.

  • Lawsuits involving serious harm often result in large settlements.

  • Jury awards in liability cases continue to rise over time.

  • Umbrella insurance provides additional liability coverage for relatively low cost.

Many homeowners choose umbrella or excess liability policies that add $1 million or more in extra protection. An umbrella policy costs $150-$300 per year on average.

If damages exceed your liability limits, you’d be personally responsible for the excess amounts. That’s why having adequate coverage is so important.

How Does Liability Insurance Work If You’re Sued?

If someone pursues legal action against you for injuries or property damage, here is how your homeowners liability coverage would respond:

  • Your insurer provides lawyers to defend you in the lawsuit. All legal costs are covered.

  • The insurer will try to settle the claim out of court if reasonable. They are obligated to act in your best interests.

  • If a settlement can’t be reached, the claim would proceed to trial.

  • If damages are awarded by a judge or jury, your insurer pays up to your liability coverage limits.

  • You may need to contribute your own funds if awarded damages exceed your policy limits.

  • Your rates may increase at renewal time after a liability claim.

The key benefit is that your insurance provider handles the legal aspects and pays damages up to your coverage limits. However, the claim could still impact your premiums later on.

What Does Liability Insurance Not Cover?

While personal liability insurance is broad, there are some important exclusions to be aware of where it would not apply:

Auto accidents – Any accidents involving vehicles are excluded. You need separate auto liability insurance to cover injuries or damage from a car accident.

Professional services – Claims alleging your professional negligence or malpractice are not covered. Doctors, lawyers and certain other professionals need professional liability policies.

Intentional acts – Damages you cause intentionally or expect are excluded. However, coverage still applies even for intentional acts by children if you didn’t anticipate or promote the actions.

Business activities – Liability claims alleging negligence related to your business pursuits or operations are generally excluded. You need a business owners policy for commercial exposures.

Contractual liabilities – Breaches of contract are not covered under personal liability. However, liability coverage does still apply to third-party bodily injury and property damage claims related to contracts.

While very broad, these common exclusions illustrate scenarios where homeowners liability insurance would not respond. An umbrella policy can sometimes cover gaps like auto and business liabilities.

How Does Liability Coverage Differ from Medical Payments Coverage?

In addition to the liability coverage L, homeowners policies include a separate coverage called medical payments or med pay, which is coverage M. Here are the main differences:

Liability Coverage Medical Payments Coverage
Covers bodily injury and property damage Covers medical expenses only
Pays legal damages you are liable for Pays medical bills regardless of fault
Requires a lawsuit and negligence finding No lawsuit or liability finding required
Typically higher coverage limits Typically lower limits like $5,000

So in a nutshell:

  • Liability coverage pays for property damage and bodily injury damages as awarded in lawsuits.

  • Medical payments coverage pays smaller medical bills regardless of who was at fault.

These two coverages work hand in hand to protect homeowners from liability exposures. Talk to your insurance agent to ensure you have adequate limits for both.

FAQs about Homeowners Personal Liability Insurance

How much liability insurance should I have?

Experts recommend at least $300,000-$500,000 in liability coverage. Severe injuries can result in larger settlements. Umbrella policies provide extra coverage relatively inexpensively.

Does my policy cover dog bite claims?

Yes, the liability portion of homeowners insurance covers dog bites. However, some insurers may exclude certain dangerous breeds or require you to carry special coverage.

If a neighbor’s kid breaks an arm in my pool, am I covered?

Yes, your liability coverage would pay for their medical bills and any lawsuit damages up to your policy limits, if you are found legally responsible due to negligence.

Does liability insurance cover emotional distress claims?

Yes, personal liability policies cover claims alleging mental or emotional distress due to your negligence. However, state laws differ in the types of emotional distress claims allowed.

Can I be sued if someone consumes alcohol at my home and is then injured?

It depends on state laws regarding social host liability and serving alcohol to minors or intoxicated guests. Your liability coverage may respond to some alcohol-related injury claims.

Why Liability Protection Is Critical for Homeowners

A homeowners insurance policy can’t prevent accidents or lawsuits from happening. But personal liability coverage is designed to protect you financially when they do occur.

Key reasons to secure adequate liability insurance:

  • Bodily injury claims and lawsuits are commonplace. Damages add up quickly for serious injuries requiring ongoing medical care.

  • Awards and settlements often reach hundreds of thousands of dollars or more. Jury awards keep rising over time.

  • You worked hard for your assets. Liability insurance helps shield them.

  • Peace of mind knowing you are protected if an accident happens.

  • Allows you to host family and friends at your home without undue financial risk.

  • Coverage is inexpensive, especially with umbrella policies adding extra limits.

Don’t wait until you get sued to realize your liability limits are inadequate. Check your coverage today and consider investing in an umbrella policy.

The Bottom Line

Coverage L on homeowners insurance provides broad protection against liability claims. It covers legal costs and damages awarded for injuries or property damage occurring on your property.

Having sufficient limits ensures your assets are protected if an accident leads to a lawsuit. Umbrella insurance provides affordable extra coverage above your base policy limits.

Insurance 101 – Homeowners Insurance Coverage | The Ultimate Guide to Home Insurance


What does coverage L cover?

Personal liability insurance is about financial protection – for you and your family. The personal liability coverage within your homeowners policy provides coverage to pay for claims of bodily injury and property damage sustained by others for which you or covered residents of your household are legally responsible.

What is Coverage L in a personal liability supplement provides?

Coverage L — Liability — We pay, up to our limit, all sums for which an insured is liable by law because of bodily injury or property damage caused by an occurrence to which this coverage applies.

What are the 3 basic levels of coverage that exist for homeowners insurance?

Homeowners insurance policies generally cover destruction and damage to a residence’s interior and exterior, the loss or theft of possessions, and personal liability for harm to others. Three basic levels of coverage exist: actual cash value, replacement cost, and extended replacement cost/value.

What is Coverage E in a homeowners policy?

Coverage E — Personal Liability This section of the homeowners policy will provide coverage in the event you or a resident of your household are legally responsible for injury to others. Coverage E normally provides a defense and will pay damages, as the insurance company deems appropriate.

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