Is liability insurance compulsory?

What is compulsory

The Third-party liability insurance for motor vehicles under the Dutch Motor Insurance Liability Act (WAM), and the basic health insurance for anyone living or working in the Netherlands.

Nothing else is required by law. Contracts can require things, though: a mortgage lender requires buildings insurance, a landlord sometimes requires liability cover.

Why almost everyone has one

Because the amounts involved in personal injury bear no relation to the premium. If someone is left permanently unfit for work because of something you did, the loss is calculated over the rest of their life: loss of earning capacity, care costs, adaptations to the home.

That runs into hundreds of thousands or millions, while the premium is a few tens of euros a year.

What it covers

Yourself, your family members and your pets. A child who breaks a window, a dog that bites someone, a knocked-over laptop at a friend's house.

Not covered: damage caused with a motor vehicle (that is third-party motor insurance), damage in profession or business (for which you need an AVB), and care, custody and control.

Who it matters most for

For families with children and for anyone with a dog. Not because things go wrong often, but because when they do, the amount is so large that nobody can carry it themselves.