Canadian Underwriter

Policies to ponder from across the Atlantic

September 18, 2015   by Sara Tatelman

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Guten tag! Hoi! Salut! Oh, the things we can learn from Europe. For instance, if Rover moves to Berlin, he’ll need Hundehaftpflichtversicherung. If you move to Paris and your daughter’s class goes on a field trip, she’ll need l’assurance scolaire. And if anyone buys property in the Netherlands, they’ll want that elusive Dutch flood coverage. The Germans, the French, the Dutch and the Belgians have different views—and laws—on what needs to be insured, and citizens, expats and tourists alike need to make sure they’re understood.

Bus vs. Little Girl… in court

Two summers ago, a ten-year-old girl ran in front of a Munich bus, the German newspaper Suddeutsche Zeitung reported. She escaped with only cuts and bruises, but the bus was damaged, three passengers were severely injured and the traumatized driver was unable to work for several months. So Stadwerke Munchen, the city-owned company that provides public services in Munich, sued the little girl for 15,300 euro to pay for the vehicle repairs, the driver’s sick leave and the passengers’ pain and suffering.

Lawsuits like that show the importance of Haftpflichtversicherung, or third-party liability insurance, in Germany, says Patrick Ott, a senior financial advisor at the independent brokerage Chamberlain, Rooselain & Cie in Munich. Sixty-seven percent of Germans buy such policies, which cover property damage and bodily injuries the insured accidentally causes. So, says Ott, if you’re walking down the street and not paying attention, “and there is a bicyclist coming by and he swerves around you, hits a lamppost and his bicycle is destroyed and he has major injuries, you are liable to pay for that.” And you thought the U.S. was the land of the lawsuit…

Certain policies also include Forderungsausfall, an add-on that pays the policyholder if they are injured or their property is damaged by an uninsured third party who can’t afford to pay damages. This type of coverage, says Ott, is especially important for expats. “This is a particular victim’s coverage… and while I don’t think that Germans are more xenophobic than people in other parts of the world, I think especially for expats coming to Germany, there is a bit of a higher risk of getting attacked for being different, or being misunderstood.”


Germans covered for dropping a friend’s flatscreen

Source: Patrick Ott, Chamberlain, Roselain & Cie

Fortunately, third-party liability insurance is affordable. Ott estimates good quality coverage costs 90 euro for a single person or 120 euro per year for a family, which includes children living at home and studying full-time. That’s handy, not only when your toddler spills your wine onto your neighbour’s Persian carpet but when your teenager does serious damage. “So a typical case,” says Ott, “it happened here in our neighbourhood, because we are quite rural, was that two teenagers were playing and smoking in a barn and started a fire, and not only the barn burned down but the entire farmhouse… We’re talking about several millions worth of damage.”

Most insurers expect to pay claims for nearly every policyholder, says Ott, and their profits primarily derive from investments. But that doesn’t mean insurers will pay every claim. Since third-party liability covers accidents such as breaking a friend’s flat-screen television when helping them move, some policyholders have their friends make fraudulent claims when they simply want to upgrade their electronics. And while this might deliver a shiny new smartphone, insurers “are rather inclined to look very closely at what happened and maybe get rid of the client the next time.” Ott also cautions clients not to claim legitimate damages if they’re quite small and to set a €500 deductible to prevent them from being tempted. “But if it’s a couple of thousand euros, I think that’s where it starts really to get interesting,” he says. A single damaged laptop claim won’t cause premiums to skyrocket but “if you had too many claims, small and big ones, eventually the insurance company might see you as a not-so-great client and cancel the contract,” says Ott. “And obviously if you come from a cancelled contract with damages before, then you can only get a new insurance with a lot of problems and certainly much higher costs.”


In Germany, small pets such as cats and guinea pigs are covered by their owners’ liability insurance, but dackels (dachshunds)—or any other dog, for that matter—require separate coverage. In cities like Berlin and Hamburg, owners are legally required to buy such coverage (though dog taxes, which vary by breed, are nationwide). Coverage kicks in when Albrecht bites someone or chews up a sofa, but everyday wear and tear isn’t included.

Winds howling through Holland

Way back in 1953, a windstorm whipped through the North Sea, and in some parts of Europe, water rose more than five metres. People died and property was destroyed across the western half of the continent, but the Netherlands, half of which is less than a metre above sea level, was hit the hardest. More than 1,800 Netherlanders died, 72,000 people were evacuated and 47,300 buildings were damaged. At the time, most policies didn’t include flood damage, so little compensation was offered. Dutch insurers began discussing the possibility of covering flood risk but eventually decided that in the lowlands, floods were simply uninsurable.

Forty-five years after the flood, the government, which is constitutionally required to ensure the country is habitable, introduced the Calamities Compensation Act. The catastrophe scheme was designed to help Netherlanders who lose property to floods, earthquakes and other disasters, but individuals were still unable to buy private flood insurance.

Shortly after the act was introduced, the Lloyd’s coverholder Euro-Lloyd began offering flood coverage. But premiums were high and policies only covered 25 percent of damages, so insurance penetration remained low and in 2008, the product was withdrawn. Euro-Lloyd felt its only customers were “the people who had a tremendously exposed risk to flood,” says Ralph van Helden, Lloyd’s regional manager for Benelux, “and not any of the people who didn’t have exposure to floods.”

So for another four years, the Dutch had to rely on the government catastrophe scheme for flood protection. That changed once again in 2012 when another Lloyd’s coverholder, Neerlandse, began writing flood coverage directly. Van Helden admits the original coverage wasn’t very attractive, with high premiums and a €75,000 limit. It was “much more than the Dutch government would ever pay out of the catastrophe scheme, but still, some of the rates were something like 3,000 euro for the highly, highly, highly exposed areas.”

Nevertheless, Neerlandse “had about 60,000 inquiries for an insurance quote in the first two weeks,” says van Helden. But soon after the company entered the market, the Dutch Association of Insurers proposed creating a mandatory flood insurance pool to cover up to 5 billion euro in property and contents damage, after which government compensation would kick in. Many were tempted by the prospect of cheaper and more inclusive coverage, says van Helden, and “so the stream of inquiries dried up.” Only a few hundred customers bought the product.


Non-life premiums distributed by brokers in Germany

Source: Insurance Europe

In June 2013, the Netherlands Authority for Consumers and Markets rejected the pool proposal. “Introducing a mandatory insurance would restrict consumers’ freedom of choice, and would unnecessarily raise their financial burden, while the proposed insurance scheme does not even satisfy any need,” Chris Fonteijn, chairman of the Authority for Consumers and Markets, said in a release. “Insurers should continue to have the freedom to decide for themselves whether or not they want to offer a flood insurance, and if so, in what form.” But by the time the ACM announced their position on the flood pool, Neerlandse’s flood product wasn’t doing well, and they cancelled the policies.

Two years later, Neerlandse partnered with a new syndicate and the Dutch broker network to provide more flood capacity at better rates. “So the price for that insurance for my house, and my house is five meters below sea level so I’m at a severe risk point, it’s about 130 euro a year,” says van Helden. And instead of the 75,000 euro limit, Netherlanders can insure their properties up to their full value.

Unlike Canada, which discourages future development in floodways, the Netherlands can’t prevent citizens from living in at-risk areas. “We just don’t have the space to rebuild somewhere else sometimes,” says van Helden.


Volunteer insurance has been compulsory in Belgium since 2007 and is available but not required for Dutch companies. In the Netherlands, “volunteering is not seen in the law as regular work, as paid work,” says Paul Moller, spokesperson for Allianz Benelux. And that’s the reason why, he says, you’re covered under personal liability insurance. But that’s only if the volunteer position isn’t replacing paid labour.

For instance, personal liability coverage won’t kick in if a volunteer at a nursing home breaks a resident’s Queen Beatrix teacup collection while tidying up. That’s because “you are damaging somebody else’s property which could have been done also by a regular cleaning company,” says Moller. So the liability switches to the nursing home, which would be well advised to carry volunteer insurance.

North American interns often fall into a grey labour space, but their Dutch counterparts are classified as employees. “They’re always paid,” says Moller. “But compared to regular work, not that much.” The monthly stipends are enough, however, to cover the interns under a company’s regular liability insurance, and no separate coverage is needed.

Marcel’s broken leg and self-esteem

Les crayons, les livres, une calculatrice et… l’attestation assurance scolaire? Canadians who relocate to la belle France might be surprised to find that extra line on backto-school shopping lists. While not legally required for lessons, school insurance is mandatory whenever students leave the grounds with their class, be it for a trip to the local museum, a sports day at a neighbouring school or a spring break excursion to Pompeii. This requirement stops not when children turn 18 but when they graduate from lycee (high school).

Fortunately for French parents, school insurance (or assurance scolaire) costs as little as 11 euro per year and covers both the accidents young Marcel causes and injuries he might suffer while in or en route to class, says a spokesperson for the French mutual insurer MAE, which specializes in school insurance. If a child breaks a window while playing catch at recess, school insurance would cover the repairs. If Marcel and his meilleur ami Rene get into an ugly fistfight over interpretations of Being and Nothingness, the policy would pay for any medical bills, as well as broken glasses, damaged braces and even cracked laptops (we couldn’t find out what happens with Marcel’s existential pain). Some parents opt for assurance scolaire et extra-scolaire, which covers kids 24/7, whether they’re in class, in the back garden or skiing down Swiss slopes.

In Germany, 10-year-olds can be sued

Coverage naturally changes as students get older. When kindergarteners, for example, have to stay home sick for several weeks, MAE pays for a nanny. If an older student breaks his leg and can’t navigate the Metro to get to class, school insurance would pay for l’ecole a domicile, or temporary homeschooling, to allow the student to keep up with lessons and know why those nice British people across the channel insist on rubbing Maman and Papa’s nose in old victories with a train station called “Waterloo.”

“We have a contract with an aid agency,” says MAE president Edgar Mathias, who adds that “parents know when there’s a need, they have a special phone number to call and ask for the help of a replacement nanny” or whatever else their child might require. The agency takes care of finding and remunerating nannies, while MAE reimburses families for medical bills when they submit receipts.

No matter their injuries, teenagers don’t need nannies, but they might need counseling. In recent years, says Mathias, MAE has seen more and more schools apply for psychological help on behalf of bullied students. Turns out the culture that coined the expression, l’enfant terrible, really does have a few.

Volunteer insurance has been mandatory in Belgium since 2007

Principals can apply for MAE’s emergency funding when certain benefits aren’t covered by students’ policies, and “when applications become frequent, we determine how we can make [the help many children seem to need] part of the regular insurance.” So while MAE will continue to promote bullying prevention, affected students will be able to access up to five sessions with a psychologist or psychiatrist starting in September.

School insurance also covers clothes damaged during school activities, injuries sustained while high school students are working as interns, and stolen textbooks, and even compensates parents for lost wages if they miss work to take care of their sick kindergarten- or school-aged child. The most common claims, however, are for damaged teeth and orthodontic equipment, broken limbs, serious injuries that result in long-term disability, and broken glasses. “We work from the principle that when a child causes damage, 95 percent of the time it’s an accident,” says Mathias, adding that MAE’s policies don’t include deductibles to ensure all families can buy school insurance.

One last interesting detail from the land of baguettes and liberte, egalite, fraternite: low-income families may be eligible for discounted premiums from MAE, while all families who receive food from the French charity Restos du Coeur also receive free coverage.


Belgian hunters bag wild boars and pheasants instead of moose and bear, but even though prey is smaller than in Canada, coverage requirements are much bigger. Since 1963, hunters in Belgium must buy liability insurance, and bring proof of coverage when applying for or renewing their hunting licenses.

Going after game isn’t as popular with Belgians as it is with Brits or Canadians, says Paul Moller, spokesperson for Allianz Benelux (Belgium, Netherlands and Luxembourg). With such a small base of potential clients, Allianz doesn’t focus on hunting, but still offers third-party liability coverage, valid no matter where the hunter travels, “to be able to give a full spectrum of insurance to our clients.” Policies also cover injuries caused by hunting dogs and gun-related accidents that happen at home.

Exclusions range from damage caused deliberately to damage caused “under the influence of drugs, in a state of drunkenness, [or] while mentally disturbed.” Allianz doesn’t ask questions about policyholders’ mental health before selling hunting coverage.

Copyright 2015 Rogers Publishing Ltd. This article first appeared in the August 2015 edition of Canadian Insurance Top Broker magazine

This story was originally published by Canadian Insurance Top Broker.