Personal Liability- Personal liability insurance is designed to protect the homeowner against a claim or lawsuit that could devastate the homeowner financially. If, for example, a visitor slips and falls on the front porch, the homeowner could be sued for hundreds of thousands of dollars. The homeowner also could be liable for damaging property of others.

In either event, the insurance company will pay the damages assessed against the homeowner up to the limits of the policy. While insurers offer minimum coverage, a homeowner often can obtain considerably higher protection for only a few dollars more per year in premium costs.