If you find yourself in a legal situation where you are sued for damages, your renter’s liability insurance can help cover the associated legal costs and damages. It can also keep you from paying beyond the limits of your insurance and make you not go broke in the process.
Table of Contents
What Is Renters Liability?
Renters liability will usually cover the claim in the event that the renters are responsible for the damages caused on the property.
These types of claims can be costly, so it’s important to protect yourself with insurance.
Why Do You Need Liability Insurance?
Most individuals that live in apartments or condos believe that their landlord’s insurance will cover them in the event of a disaster. However, that is far from the truth.
You need liability insurance because your landlord’s insurance will only cover the structure of the building and bodily injury. For example, if another tenant in your building trips down the stairs because they are not being maintained properly, the fault lies with the landlord.
If you have a friend over for dinner and he or she slips and falls on your wet floor, the fault lies with you.
Similar to homeowners insurance, liability insurance will cover your responsibility to the people in your home or elsewhere by you, your children, pets, and will pay your legal fees if you ever get taken to court.
What Does Liability Insurance Protect Me From?
It protects your assets. No pun intended. We all know that lawsuits can cost a ton of money and time. In some cases, a lawsuit can cost you everything you have. Having liability insurance can keep this from happening to you.
Well for starters, liability insurance protects both your current and future assets. Let’s say that you are sued for an accident that you caused and you’re not able to pay the damages assessed.
If you are a medical student currently in school, when you graduate and become a doctor, your future wages can be garnished by the courts!
It can also provide coverage for your defense in the event a lawsuit is brought against you whether you think you are responsible or not.
Personal liability insurance can provide coverage for a lawsuit you may face if you are ever involved in an accident that causes bodily harm to another person.
For instance, if you’re in an accident and you cause $20,000 in bodily harm. After their health insurance covers what they are responsible for, your liability insurance will cover the rest of the $20,000 in damages.
Also, liability insurance offers coverage for you and your family and their behavior away and at home.
For example, if you are over a friend’s house for dinner and your youngest child accidentally breaks their antique piano, if you have liability insurance, it will cover the cost to repair or replace the antique.
What Does Liability Insurance Not Cover Me From?
This is a sticky situation. When in doubt, always ask your agent. If you own a business, make sure you let your agent know so you can get the right representation and have the right protection plan secured.
Basically, if you are found responsible for something that happens at work, or is related to the job, you are excluded from certain coverages. If you sit on a board of directors or volunteer for a non-profit, you’re excluded from coverage.
The most important thing to remember is that you should never assume that you are automatically covered. If you are ever in doubt, contact your representative and have them review your policy to see how your coverage applies to your specific situation.
Why Buy Personal Liability Insurance?
These types of policies are typically purchased by individuals who have a high net worth. But a good rule of thumb is that if your net worth exceeds the combined limits of your home and auto coverage, it’s probably a good idea to purchase liability insurance.
It’s true that your homeowners insurance covers liability claims from accidents that occur on a policyholder’s property, but there is a limit to what the insurance company will pay.
Homeowners who may face fees beyond the limit of their policy could face financial disaster should an accident befall them.
Considering that it’s not that expensive to add liability coverage to your policy, you should think about taking the maximum amount offered to you.
If you have any questions or concerns, talk with your agent. He or she can go over what your specific needs are and if you require full coverage.
Liability coverage for your personal property covers many different scenarios. At the end of the day, it’s all about keeping you safe from any number of situations that may happen accidentally but leave you off the hook for the damages.