Which type of insurance policy may provide personal liability coverage as an add-on?

The correct answer is that renters insurance policies may indeed provide personal liability coverage as an add-on. These policies are designed to protect the personal property of tenants living in rented dwellings and often include a provision for liability coverage. This coverage is essential, as it can protect the policyholder from financial loss due to legal claims for bodily injury or property damage that they might inadvertently cause to others.

While homeowners insurance and condo insurance also provide a similar mechanism for personal liability coverage, especially since they are structured to protect individuals in residential properties they own or hold a stake in, renters insurance is specifically noted for its flexibility in covering renters without the need for property ownership. These add-ons can give additional peace of mind to renters, ensuring that they are safeguarded against potential lawsuits or claims.

Flood insurance, on the other hand, is focused solely on providing coverage for water damage resulting from floods and does not typically offer personal liability coverage, making it an inappropriate choice for this question.