How Much Home Insurance Personal Liability?

[accolay]

As the title asks, how much Personal Liability Insurance do I need with my homeowners insurance policy? How much do you have? My current policy has $100k. My options are $100k up to $1000k.

Adding more really doesn't seem to increase the quote very much, so I'm wondering how often insurance companies really pay out on this?

Thanks in advance.

[Sid Hoffman]

How much is up to you, but for an example, when I moved in to my current rental, they required that I carry at least $300k in liability insurance.  So the fact that they'd consider that to be the minimum I am supposed to carry implies that $100k might come up a little short.  How much to carry is hard to say though.  It's all about statistics.  The higher the coverage, the less statistically likely you are to suffer a claim that exceeds your coverage.  Where your comfort zone is can only be decided by you.

[Retired To Win]

We carry $300K liability on both the home insurance and the auto policies.  Here's the plus we get for doing that: we qualify for a dirt cheap (like $100 a year) supplemental personal liability policy that extends our coverage to a round $1 Million.  And we like that coverage.  :D

[jmusic]

We carry $300K liability on both the home insurance and the auto policies.  Here's the plus we get for doing that: we qualify for a dirt cheap (like $100 a year) supplemental personal liability policy that extends our coverage to a round $1 Million.  And we like that coverage.  :D

Good strategy.  In our litigious society, lawyers don't care about our FIRE plans if they can tangentially prove that we caused a real or imagined injury to a client of theirs (Wow, lots of $10 words!).  I have $300K for renters and auto, but I haven't yet added an umbrella policy.  I didn't realize they were so cheap.

[jwilliams0215]

We carry $300K liability on both the home insurance and the auto policies.  Here's the plus we get for doing that: we qualify for a dirt cheap (like $100 a year) supplemental personal liability policy that extends our coverage to a round $1 Million.  And we like that coverage.  :D

Good strategy.  In our litigious society, lawyers don't care about our FIRE plans if they can tangentially prove that we caused a real or imagined injury to a client of theirs (Wow, lots of $10 words!).  I have $300K for renters and auto, but I haven't yet added an umbrella policy.  I didn't realize they were so cheap.

I just received a couple quotes, they seem to range between $350 - $450 dollars for the year (at least based on my few quotes) on $1 Million coverage.

[HazelStone]

As the title asks, how much Personal Liability Insurance do I need with my homeowners insurance policy? How much do you have? My current policy has $100k. My options are $100k up to $1000k.

Adding more really doesn't seem to increase the quote very much, so I'm wondering how often insurance companies really pay out on this?

Thanks in advance.

Basic statistics- the lower the probability, the lower the cost to cover the risk in question.  Liability insurance also covers the cost to defend you in a lawsuit on a covered claim. $100K really isn't much nowadays; $300K tends to be the most popular...because it's the default. An umbrella policy is a good thing to have, especially as a backstop to your auto coverage. The region where I live is crawling with lawyers. If, God forbid, I was deemed at-fault in a car accident with significant injury/lost work time, $300K isn't likely to go far.

[Mutton Chop]

Full disclosure, I work in the insurance industry.

Liability insurance is one of the best values for the money.  We carry $500,000 on our home.  A common misconception is that higher limits of coverage will double or triple your premiums.

If you're at fault in a bad enough car accident, your personal assets will be at stake if you don't have enough liability coverage.

[crystalpatterson]

We have approximately $412 for a year. There are many factors that affect personal liability amount like your income, your investments in other property. Umbrella policy was also launched in this concern. Check some points about this policy here.

[dude]

We carry $300K liability on both the home insurance and the auto policies.  Here's the plus we get for doing that: we qualify for a dirt cheap (like $100 a year) supplemental personal liability policy that extends our coverage to a round $1 Million.  And we like that coverage.  :D

Good strategy.  In our litigious society, lawyers don't care about our FIRE plans if they can tangentially prove that we caused a real or imagined injury to a client of theirs (Wow, lots of $10 words!).  I have $300K for renters and auto, but I haven't yet added an umbrella policy.  I didn't realize they were so cheap.

I just received a couple quotes, they seem to range between $350 - $450 dollars for the year (at least based on my few quotes) on $1 Million coverage.

300K auto, 300K home (per occurrence for both), got a $1million dollar policy from GEICO for $195 (just a couple weeks ago).  Worth every penny, IMHO.  Every state has different homestead and retirement account protections, but far preferable for me to put the worry to bed for a measly $195/year.

[TheInsuranceMan]

Full disclosure, I work in the insurance industry.

Liability insurance is one of the best values for the money.  We carry $500,000 on our home.  A common misconception is that higher limits of coverage will double or triple your premiums.

If you're at fault in a bad enough car accident, your personal assets will be at stake if you don't have enough liability coverage.

I'll second this, liability is cheap.  We won't write a policy w/ less than 300k in liability coverage - I carry 500k on my homeowners, and carry 500k liability coverage on my vehicles as well.  I worked in what they call "subrogation" for a large insurance company, collecting money from uninsured and underinsured people.  Insurance is a lot cheaper than the repercussions of not carrying enough.

[BlueMR2]

$300k.  More than that is tough to get as they really want you to just go to an umbrella instead of just upping the liability (I suspect this is due to location, we're in a low COL location, you can buy 3 nice houses for $300k).  And at $780 per million of umbrella (we fall into a high risk group due to owning several cars), well, that's a pretty good sized chunk of my salary...  Nevermind the fact that the umbrellas specifically prohibits me from indulging in one of the events that makes life worth living.  :-/  I'm risk averse and really want the umbrella, but the costs are just too high.  Sigh.

[Mutton Chop]

$300k.  More than that is tough to get as they really want you to just go to an umbrella instead of just upping the liability (I suspect this is due to location, we're in a low COL location, you can buy 3 nice houses for $300k).  And at $780 per million of umbrella (we fall into a high risk group due to owning several cars), well, that's a pretty good sized chunk of my salary...  Nevermind the fact that the umbrellas specifically prohibits me from indulging in one of the events that makes life worth living.  :-/  I'm risk averse and really want the umbrella, but the costs are just too high.  Sigh.

$780 for a $1mm umbrella is crazy high.  Do you guys have accidents or tickets on your driving records?  I'd recommend shopping around.

[merula]

I work in insurance, and I'm going to disagree. I don't carry an umbrella, and my liability limits are fairly low. Why? Because high limits are a gold mine for insurance carriers. The loss ratio (losses paid out divided by premiums) is something like 40% on umbrella (depending on who you ask and what you include/exclude).

Here's what I'd do: do some reading or talk to a lawyer and find out what could happen in a worst-case liability scenario. What's your state's homestead exemption? What assets could be seized? (Federally, 401ks can't be.) You'll likely find that you're not as much of a target as your net worth number makes it seem. Then weigh the risk against the cost of the umbrella and make a rational decision.

[BlueMR2]

$780 for a $1mm umbrella is crazy high.  Do you guys have accidents or tickets on your driving records?  I'd recommend shopping around.

My record is totally clean.  My wife hasn't had an incident in the past 8+ years now (and never since we've been married).  I've shopped around, the quotes all come in +/- $10 of that number.  I looked up the rating info and it's because between the 2 of us we own 4 vehicles, so that tosses us into the highest risk group.