Liability insurance: what sum insured makes sense?

When it comes to personal liability insurance, the numbers are staggering: sums insured in Switzerland range from CHF 3 million to CHF 20 million. Find out here why the coverage is so high.

Although not compulsory, personal liability insurance is one of the most important types of insurance. Of course, we all sincerely hope we never need it, as accidentally injuring someone is one of the worst things you can experience. The guilt alone is hard to bear. But that’s not all: a mishap or a moment of inattention can also have serious financial consequences.

Sum insured – what does that mean?

The sum insured specified in the insurance contract is the maximum amount that your insurer will cover for you. If this amount is insufficient, you will have to pay the rest of the claim costs out of your own pocket. Here your liability is unlimited, as you’re liable for everything you own, including your future income.

How high should coverage be?

In Switzerland, some insurers already offer coverage from CHF 3 million. This is the absolute minimum: liability insurance is about insuring against major risks that you could never bear yourself, so large sums insured are generally recommended. With AXA, you select a sum insured of CHF 5, 10 or 20 million.

Why are the sums insured for liability so high?

Because mishaps can sometimes have very high consequential costs. Personal accidents in particular can sometimes result in six- to seven-figure claim amounts. If you’re at fault for someone being seriously injured, your personal liability insurance may have to cover: 

• Medical treatments and therapies
• Loss of earnings of the claimant 
• Compensation for pain and suffering
• Home help
• Cost of conversion to barrier-free living

Then why are the premiums relatively cheap? 

Extreme events as described above are fortunately very rare. From a purely statistical point of view, the risk is correspondingly low. And yet there is still a residual risk. Those who are unlucky at some point will be grateful for a sufficiently high sum insured for the rest of their lives. Take your gut seriously. If it makes you feel better and you can afford it, choose the maximum coverage. AXA offers this for an individual person for as little as CHF100 per year, depending on the precise nature of the benefits.

What deductible should I choose? 

The deductible has a much greater effect on the level of your premium than the sum insured. If you only adjust your deductible slightly upwards, you can generally opt for a high level of coverage – and the premium remains the same: calculate the various options yourself in our premium calculator.

The reason for the strong effect of the deductible is clear: the lower the deductible, the higher the probability of an insured loss event occurring in the near future. Have a think about how much you could no longer easily pay yourself in the event of a mishap. Choose your deductible based on this – with AXA between CHF 200 and 5,000. This way, you’ll be covered for major risks without having to pay unnecessarily high premiums year after year. 

Tips

Regardless of which insurance coverage you choose, take these tips with you: 

1. Insure major risks. Better a little more deductible, but a higher sum insured.
2. Include gross negligence. Don’t forget, because this optional addition is a must!
3. Check supplementary coverage. Do you often drive other people’s cars or do carsharing? Are you a hunter, do you own a pet or rent horses? Do your keys have a tendency to get lost? Then the corresponding supplementary coverage is worthwhile for you.