What does personal liability mean in renters insurance

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• There are two components to renters insurance: personal liability and personal property coverage.
• Personal liability protects renters if someone is injured on their property and sues for damages.
• A basic renters policy has a $100,000 liability limit, but you can increase it or get an umbrella policy.
• See Insider's picks for the best renters insurance companies.

Renters insurance protects both you and your personal property. There are two main coverage areas of a renters insurance policy: personal property coverage and personal liability coverage. 

Personal property coverage is the most well known feature of renters insurance. If your belongings are stolen or damaged, renters insurance will replace them. Personal liability coverage, on the other hand, protects renters if someone is injured in their rental property — like a slip and fall or a dog bite.

What is personal liability insurance?

If your dog bites a guest or someone is injured in your rental unit, personal liability insurance protects you. Renters insurance also offers personal liability protection if someone sues you for damages. 

There are limits to standard personal liability coverage depending on your policy and insurance carrier, usually $100,000. This is important if you are renting a home that has a swimming pool or trampoline — you may need to increase your liability coverage. 

Increase your personal liability coverage if you have a pool or pet

Having certain items — like a pool or trampoline — can increase your liability as a renter if you are renting a home with these items. This doesn't apply to renters living in a complex with a community pool or play area.

According to the Insurance Information Institute, "A pool is considered an 'attractive nuisance' and will increase your liability risk." The Institute recommends increasing your liability coverage to at least $300,000-$500,000 if you have a swimming pool. 

Similar to swimming pools, some renters insurance carriers consider trampolines an "attractive nuisance" and exclude them in policies. Other carriers have specific language for trampolines, requiring netting or that they are anchored to the ground depending on your state, according to Steve Wilson, senior underwriting manager at Hippo Insurance. 

Also, exotic pets and certain dog breeds are excluded from some renters insurance policies. Some renters insurance companies will not offer coverage based on the size and breed of the dog, especially large dogs and breeds considered to be aggressive. 

According to Wise Insurance Group, most insurers consider a pet to be exotic if:

• A permit is required to buy the pet
• You need to modify your home or yard to contain the pet
• The pet is a hybrid of a domesticated and non-domesticated animal (like wolf and cat hybrids)
• The animal is found naturally in the wild

Pet liability coverage is not pet insurance. Pet insurance is a health plan for your pet. Pet liability covers damage or injury your pet causes to someone. Also, damage to you or your personal property by your pet will not be covered.

An umbrella policy is additional liability coverage that's available as an add-on rider to your renters insurance. Umbrella coverage kicks in after you have used up your personal liability coverage limit.

Another option if you have a restricted dog breed and cannot get an umbrella policy to cover your pet is canine liability insurance. Canine liability insurance offers coverage if your dog bites or attacks someone. It's a separate policy that is helpful if your renters insurance doesn't offer coverage for your breed. 

If you have an exotic pet, X-Insurance offers exotic pet liability insurance.

How much is personal liability insurance for renters? 

The average cost of renters insurance is around $15 a month, or $180 yearly. Standard renters personal liability coverage is $100,000. 

A million-dollar umbrella policy costs between $150 and $300 a year, according to the Insurance Information Institute. However, the Institute notes that most carriers require renters to have at least $300,000 in personal liability coverage before selling them an umbrella policy.

Ronda Lee was formerly an associate editor for insurance at Personal Finance Insider covering life, auto, homeowners, and renters insurance for consumers. Before joining Business Insider, she was a contributing writer at HuffPost with featured articles in politics, education, style, black voices, and entrepreneurship. She was also a freelance writer for PolicyGenius. She worked as an attorney practicing insurance defense and commercial litigation. 

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