You have all at least heard the term “civil liability.” Perhaps you learned at that time why it is important to have it, or perhaps you already knew?
In any case, we thought we would offer you a little clarification on this subject, as many people tend to believe that it only applies to car insurance. However, the civil liability component of a home insurance policy is just as important! Please note that you can take out a home insurance policy that includes this coverage, whether you own or rent your home.
William Ward, an independent insurance broker at Assurances Multi-Risques, has a clear opinion on this subject (as do all of us at AMR, for that matter!). Having seen it all in his current and past work experiences in insurance claims involving civil liability, we felt it was relevant, even necessary, to share his insights with you in this article!
So here’s what William had to say about home insurance!
What is civil liability, and what are the differences between civil liability in auto insurance and civil liability in home insurance?
William: In residential properties, civil liability insurance mainly covers you in the event of a dispute. In the event of an accident that causes harm to a third party, for example (another tenant or the owner of the building if you are a tenant), and you are sued, your civil liability insurance will compensate you.
In auto insurance, civil liability covers you if you are responsible for an accident that causes physical injury and/or property damage to another person.
In both cases, it is the same principle, except that it applies to different situations!
In Quebec, liability insurance is mandatory for automobiles. Is it also mandatory to have liability insurance for your home?
William: Unfortunately, no, it is not mandatory to have home insurance in Quebec. And even before I started working in insurance, I always found it illogical that home insurance for renters was not mandatory.
I think it’s a huge risk for the tenant not to be insured, just as it poses a significant risk for the landlord. The reason I say this is that before becoming an insurance broker at AMR, I worked in the claims department of an insurance company, and I saw so many people go bankrupt over things that were honestly trivial…
Let me give you an example: one day, the two- or three-year-old child of a woman who was renting an apartment in a building left a toy in the bathtub, causing the bath to overflow significantly. The woman did not have home insurance (so she was not covered for civil liability), and the tenant below sued her for the damage caused. The woman had to pay the entire cost of the repairs, which amounted to $50,000! Since she couldn’t afford it, she had to declare bankruptcy because she obviously didn’t have the money to pay for the damage caused to the building and the downstairs tenant’s property.
But that’s just one example among many! That’s why I firmly believe that home insurance should be mandatory for everyone, at least to cover civil liability.
Are there any other advantages to having liability insurance?
William: Yes, there are others, such as being covered even when away from home. When traveling, for example. I’m going to talk about my personal experience again, but it gives a good idea and it’s the kind of accident we see very regularly!
Bicycle accidents! If you’re coming back from a night out drinking, for example, and you don’t want to drive, so you take your bike, I’ve often seen people crash into vehicles! It’s funny to say, but this kind of accident can cause quite a lot of damage. Well, if that were the case, it would be the civil liability component of your home insurance that would cover you.
But any accident outside the covered locations, whether you injure someone by accidentally running into them with your bike, or injure or break something, even if you are on foot, well, liability insurance is there to guarantee you protection in the event of a civil lawsuit.
It is important to check your policy, however, as some liability insurance policies even extend to international coverage. So people who travel a lot would be well advised to take out this type of policy! Ask for the “extended coverage” option, which we recommend in all cases anyway.
As an independent insurance broker, what would be your best advice on this subject?
William: Unsurprisingly (laughs), my best advice would be to make sure you have at least civil liability insurance. At AMR, we strongly recommend taking out comprehensive home insurance that covers water damage, for a variety of reasons, but if someone considers insurance to be an unnecessary expense and is not prepared to invest in protecting their assets and property, it is in their best interest to at least take out civil liability insurance to be covered for a minimum of $1,000,000, with the bare minimum of $15,000 for property and furniture. This is the most “basic” policy available.
And in the best-case scenario, this person would opt for $2,000,000 in liability insurance with a comprehensive “extended risk” form. All this to say, home liability insurance is really important!