Which of the following is true regarding the Personal Liability Supplement

Personal liability insurance, also known as "comprehensive personal liability (CPL) insurance," is a component of a homeowners insurance or an umbrella insurance policy that protects you and members of the your household against claims resulting from injuries and damage to other people or their property. It prevents you from having to pay large sums out of pocket if you are held legally responsible (liable) for something detrimental that happens to a third party. 

Key Takeaways

• Personal liability insurance provides you with protection against claims resulting from injuries and damage to other people or property.
• Though typically part of a homeowners policy, personal liability insurance can also be purchased separately.
• Umbrella insurance policies provide additional personal liability coverage, kicking in after your homeowners coverage is exhausted.

Understanding Personal Liability Insurance

Personal liability insurance is one type of a broader coverage category known as liability insurance or "third-party insurance." Several varieties of liability insurance exist, but they all have in common one crucial element: They cover not mishaps to you but mishaps to other people that you inadvertently cause or could be held responsible for.

As the name implies, personal liability insurance covers an individual against claims for liability arising out of bodily injury or property damage that are related to personal activities.

There are three ways to get personal liability coverage:

1. It is packaged with your homeowners, renter's, or dwelling insurance policy. Most personal insurance policies include this coverage, which is also called "comprehensive personal liability."
2. It is purchased as a stand-alone policy—often by individuals who do not own or rent physical property (and so don't need homeowners insurance).
3. It is added to an existing policy—usually a personal auto or watercraft policy.

When it's part of a homeowners policy, personal liability coverage isn't just limited to insured premises. The coverage can extend to incidents that happen elsewhere. The policy pays for bodily injury or property damage caused by an occurrence for which the coverage applies, subject to certain exclusions. Generally, the coverage extends to attorney fees, court costs, and any settlements up to the amount specified by the insurance contract.

Other types of liability insurance, such as malpractice insurance, cover claims arising from your professional or business activities.

What Does Personal Liability Insurance Cover?

Although they rarely get to the lawsuit stage, many liability-related claims are quite commonplace. Some of the scenarios include:

• Your dog bites a visitor to your home
• The mail carrier slips and falls in your driveway
• You're found at fault for a multicar collision on the expressway
• Your teenager left a lit cigarette unattended while hanging at a friend’s home, starting a fire that damaged half the house

Homeowners policies usually provide a maximum of $100,000 to $300,000 in personal liability coverage. Umbrella policies pick up where these limits leave off and provide comprehensive personal liability coverage of $1 million or more. They also cover certain liability claims that homeowners insurance may not, such as libel, slander, and malicious prosecution. Mainly, though, they're useful if your homeowners policy limits are lower than the injured party's claim and/or the legal expenses connected with it.

How Personal Liability Insurance Policies Work Together

Let's say your personal liability coverage under your homeowners insurance maxes out at $300,000. You also have a personal liability umbrella insurance policy that maxes out at $1 million. You're sued for $800,000 for a covered incident and—gulp—the plaintiffs win.

You'll first pay your homeowners insurance deductible, say $1,000. Then your homeowners insurance will pay the next $299,000 of the judgment, which gets you to that policy's $300,000 maximum. The umbrella policy will pay the remaining $500,000. You won't have to come up with that half-million from your personal assets—thanks to your high amount of comprehensive personal liability coverage. (For related reading, see The 6 Best Umbrella Insurance Companies.)

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.

For example, if someone falls down your stairs, or your child accidentally throws a ball through a neighbor's window, breaking an expensive vase, you may be held legally responsible for the damages caused.

Many homeowners insurance policies provide a minimum of $100,000 in personal liability coverage, meaning the insurance company can pay up to that amount in total to injured persons per occurrence. If you feel you need more protection, higher limits are available. You can also purchase an umbrella policy which enables you to extend your liability coverage beyond the limits of your primary liability policy.

If you don’t currently have personal liability coverage, contact Travelers Insurance or get a home insurance quote today.

What Does Personal Liability Insurance Cover?

Personal liability insurance covers a variety of situations where you may be legally responsible to pay for something that happened to someone else on property that you own or, in some situations, on property that you don’t own. Some examples of common personal liability claims are:

• Medical bills that result from a visitor’s injury at your home
• Legal expenses resulting from lawsuits that seek to recover damages that are potentially covered by the policy
• Bodily injury or property damage that results from your negligent acts or omissions
• Bodily injury or property damage caused by your pets

Medical Payments

Another type of personal liability coverage typically included with your homeowners policy is for medical payments to others. Typically, a homeowners, renters or condo policy provides for the payment of necessary medical expenses for persons who are accidentally injured on your property. This is regardless of whether you are legally responsible.

Typically, medical payments coverage limits start at $1,000 per person. Higher amounts of coverage may also be available depending on the type of coverage you choose.

What is Not Covered by Personal Liability Insurance?

Your homeowners or renters insurance will cover certain personal liability claims, but there are other claims that may not be covered. A few common examples include:

• Liability that results from a car accident. These claims should be covered by your car insurance.
• Bodily injury or property damage caused intentionally by you or a family member.
• Injuries or damages sustained by you or other covered residents in your home.
• Bodily injury or property damage arising out of any business conducted by you or arising out of your professional activities. Claims that arise while you are engaging in any business-related activities should be covered by a business insurance policy.

Other Liability Coverage Exclusions

A homeowners, renters or condo policy does not cover all situations of bodily injury or property damage for which you or a covered member of your household may be legally responsible. Most policies contain exclusions and exceptions, so it’s important to understand the details of your specific coverage.

To better understand your personal liability coverage and other important insurance topics, talk to your local independent agent or Travelers Insurance representative today.

What is the purpose of personal liability coverage quizlet?

Which of the following losses would be covered under the DP 1?

Which of the following perils would be covered under a dwelling policy quizlet?

Which of the following is true regarding Section II of the homeowners policy?