Personal liability cover - The underappreciated benefit of contents insurance

By Sumarie Greybe

When you buy car insurance, you know that you’re not just covering yourself against damage to or the theft of your own vehicle – you’re also protecting yourself from spending a lifetime repaying the damage caused to a Range Rover or Ferrari should you be held liable for an accident. Did you know that you should also be thinking about your home insurance cover in the same way?

Home contents policies usually include something called personal liability cover. Personal liability is when you are held legally responsible for injuring someone else or damaging their property. Personal liability cover provides financial and legal protection should someone claim against you or take you to court because they believe you’re responsible for an injury, loss or damage they have suffered.

One of the best things about this insurance is that it provides cover for incidents both inside and outside your home, for example, at the local mall or park. Here are a few examples:

• Someone gets hurt in your home: A friend breaking an ankle after falling into a ditch in your garden, for example.

• A person or pet that’s a part of your household accidentally injures another person or pet: Your dog mauls your neighbour’s prize-winning poodle when you go out for a walk.

• You accidentally damage someone else’s property or belongings: Your toddler dings a R5 million Lamborghini with a shopping trolley in the mall parking lot or a tree in your garden falls on your neighbour’s roof.

• You accidentally damage your rented property: You forget to turn the bath tap off before leaving for dinner. You get back late at night to discover the whole apartment is flooded and the carpets are ruined.

In each of these cases, if you have personal liability cover, your insurer would either settle with the party claiming against you, or defend the claim in court. If you did not have personal liability insurance, the legal fees and the settlement might leave you seriously out of pocket.

There are some things personal liability does not cover:

• Injuries or damage caused by someone who isn’t a part of your household.

• Injury or property damage caused by insured business activities.

• Personal injury to yourself or a member of your household.

• Deliberate damage of someone else’s property or intentional harm of another person.

• Damage caused by your car (this is covered by third party liability on your car insurance).

• Damage or injuries caused as a result of an illegal activity.

How do I get personal liability cover and how much should I get?

In most cases, you can get it as part and parcel of your homeowner’s or home contents insurance. When you sign up, you will usually be asked how much personal liability coverage you want.

Even if you’re young, renting and don’t own many valuable items, home insurance may be worthwhile for the personal liability protection it includes.

At Naked, our average policyholder goes for R5 million in personal liability cover – the minimum is R2 million and the maximum is R10 million. It sounds like a lot of money until something does go wrong and you are held liable. When quoting for contents insurance on the Naked app, you can easily see, in real time, how much your premium changes for different levels of cover.

Sumarie Greybe is the co-founder at Naked Insurance

PERSONAL FINANCE