Courtesy Reductions

The term "courtesy reductions" (German: Gefälligkeitsabzug) is used primarily in relation to personal liability insurance.

When you volunteer a service without receiving direct compensation (financial or otherwise), you are performing a “courtesy”. In legal terms, courtesies are defined as non-binding services (in the case that the person volunteering services specifically prefers to avoid a binding commitment).

Examples of courtesies are goodwill services for neighbors (feeding pets, housesitting) or services offered out of friendship (helping a friend with a move, for example).

Insofar as liability is concerned, courtesies are treated very differently from contractual agreements: you are only liable for losses caused by careless actions. Even when you do act carelessly, your liability is still limited under Swiss law.

Depending on the case, your liability for damages caused by negligence may be diminished by as much as 50 percent when you were providing a service as a courtesy. The “courtesy reduction” refers to the portion of the costs for which you are not held liable. In insurance, this reduction does not always work in your favor, as this example shows.

Example:

You help your girlfriend to move homes. While transporting her belongings, your girlfriend’s newly bought, 1500-franc stereo rack slips through your fingers and is completely destroyed. Your liability insurance provider will not be obligated to cover the full cost of the stereo, because you were acting out of courtesy. The “courtesy reduction” in this case might amount to as much as 750 francs. You (or your liability insurer) would only be liable to pay 750 francs, while your girlfriend would have to take a 750-franc loss.

However, many Swiss insurers do not make use of the courtesy reduction loophole as long as claims are lower than a predefined amount.

Example:

Your liability insurer does not account for courtesy reductions when claims are lower than 5000 francs. Result: Your insurance provider covers the full 1500 francs, and your girlfriend is fully compensated.

More on this topic:
Personal liability insurance comparison