Accidents happen, and they can happen to anyone. From causing a collision on the road, to causing a fire at your rental property, or even letting go of your supermarket trolley which rolls into a stranger's car; we all make mistakes from time to time, and it is our responsibility to fix them.
That’s what liability insurance can help with. If you accidentally damage someone else’s property, the liability cover under your home, car or contents policy may cover you for the cost to repair the damage.
There are several kinds of cover for liability, so what are they?
Home and contents
“All of our brands offer legal liability of up to $1,000,000 as part of standard home and contents policies,” says Wayne Tippet, Executive General Manager of Claims.
“Let’s say you’re visiting an antique shop and you accidentally drop a vase; your home or contents policy could cover you for the cost to replace the vase or repair the damage you accidentally caused.
“Liability is a very helpful feature of our standard home and contents policies. Not only are your home and personal belongings protected; you are protecting yourself against any accidental mishaps that may occur.”
Third-party insurance
“A third-party policy is the minimum insurance cover that you should have for your car, or someone else’s car that you are using. No one can ever guarantee that they won’t cause an accident, and the financial consequences of doing so can be devastating,” says Wayne.
“If you get into a car accident and damage someone else’s car, your third-party insurance usually covers the cost of repair to their vehicle. If their car is a total loss, your liability cover grants reimbursement of the market value of it.
“Fences, power poles and traffic signs are examples of property that can also be damaged in a car accident, and that you would be liable for the repair of if you didn’t have cover.
“Everyone on the road should consider this insurance at the very least if they don’t already have cover. Third-party policies are available on their own as an affordable, basic option with our brands. The cost is about a cup of coffee per week.
“This is particularly important for drivers under the age of 25, who are 26% more likely to have an accident.” *
AMI, State and NZI offer three different kinds of car policies:
All three of these policies cover you for damage you may accidentally cause to someone else’s vehicle. However, Third Party, Fire and Theft also covers you for theft and fire damage to your own vehicle. Comprehensive car insurance covers you for all that, plus damage to your own vehicle.
Renters insurance
Renters insurance covers your personal belongings, like your furniture, electronics, clothing, and other valuable items, if they are lost or damaged and you need to replace them.
Additionally, if you accidentally cause damage to someone else’s property outside your home, renters insurance also provides cover for your liability.
Think of the example of losing control of your supermarket trolley and rolling it into somebody's car or dropping a vase in an antique shop; your insurance usually covers your legal liability.
For more light reading:
Comprehensive car insurance
Third party, Fire and Theft
Third party only
Renters insurance
*Statistics based on AMI, State and NZI’s claims data statistics from June 2019 – May 2022 period.