Buying a new apartment or house is a significant financial outlay, so it is not surprising that young property owners want to save first after such an investment. Homeowners insurance is out of the question for many young homeowners. For some homeowners, insurance premiums are also getting too expensive. Therefore, in some cases it is also deselected. Is it so smart? Does not everyone need home insurance?
Insurance is very important
When buying a home on credit, we usually limit ourselves only to the insurance policies that are forced on us by the bank. We are talking about building insurance here, d. h. insuring real estate against fire, natural disasters and similar risks and, of course, life insurance.
Brief explanation of building insurance: building insurance guarantees that in case of fire or complete destruction of the financed house, the insurance company will pay out the amount of the loan taken under the so-called assignment contract.
Simply put, if a house is destroyed, z. B. by a flood or lightning, the insurer transfers the entire amount paid to us under the mortgage to the bank's account. The cost of such insurance is usually low. Insurance companies calculate it based on the market value of the purchased property.
For example, the premium for such insurance for a house worth 250.000 EUR around 250 EUR per year. However, this is only a rough guide. The exact cost of the insurance depends on the scope of the policy and other parameters.
For some banks it is also important to insure the life of the borrower, which is why some of them require this form of collateral from their customers. A well-calculated and constructed life insurance policy is important, because it is a financial protection of your own family.
Home insurance costs – choosing the right sum insured
The sum insured, for which the household contents are insured, is the upper limit of the liability of the insurer. Therefore, the sum insured should be equal to the market value of the household goods. If the household goods are destroyed or bspw. If the property is lost due to burglary, the owner will receive funds that will allow him to repurchase equivalent household goods.
Note: If your home insurance has become too expensive for you, you should carry out an insurance comparison and compare your existing contract with the policies of other insurers. Use the independent home insurance comparison on versicherungsriese.en.
When you decide to purchase a homeowner's insurance policy, you can choose between two insurance options – insurance against actual value or replacement value. This is a big difference.
The first option is much more popular because it is cheaper. But in the case of a total destruction you can rely only on so much as the property was worth. The insurer deducts the so-called technical wear and tear, d. h. it deducts the value calculated according to the tables of technical wear and tear from the value as new.
Read the insurance documents of the household insurance
There you will find all exclusions, d. h. Situations where we do not have insurance coverage. What are these exclusions? First of all, let's clarify what is always covered in a home insurance policy. Damage due to the following influences/causes is covered:
- Fire
- Tap water
- Lightning strike
- Storm and hail
- Explosion and implosion
- Burglary
It is worth checking whether we cover the so-called hose damage, d. h. by the breaking or detachment of water-carrying hoses to the washing machine or dishwasher, are compensated. In addition, we should check the insurance documents to see whether burglary is covered even if the door was only locked, i.e. not locked.
Attention: to determine the direct cause of water damage, the insured must sometimes z. B. open a part of the ceiling, floor or wall, which is associated with additional costs. Insurers cover these costs only up to a certain amount. Usually it is a few thousand euros. Finally, the so-called deductible (excess) should be emphasized. This is the value up to which no compensation for any losses will be reimbursed.
How likely are damages to the home contents?
Most often we use insurance because of floods (77%). Burglary has been experienced by 18% of respondents. 9 percent experienced fire and 7 percent experienced devastation. Damage due to electrical overvoltage was complained by 3% of the insured and as a result of the storm – 3%. Insurance does not usually cover theft of items such as payment cards, documents, manuscripts. They are also reluctant to pay compensation for damaged jewelry, computer equipment, photographic equipment, or other rare and valuable items.
How can you protect yourself against? – If you have items of artistic or historical value (paintings, furniture, sculptures, coin collections), make sure they are insured at market value. They are usually not insured at standard conditions.
To protect them, it is necessary to have special burglary protection measures and sometimes documents confirming their authenticity and origin. What happens if all the electronics in the house are destroyed by a lightning strike or a power surge? It all depends on what type of insurance policy we choose. Let's check the terms and conditions to see if we are insured for such a case.
Which optional additional protection makes sense?
You can't insure against all eventualities. However, nowadays we have to take a closer look, because some risks are not included in the standard policies, although we would actually assume them to be. The following is only insurable through optional additional coverage:
- Natural hazards
- Glass breakage
- Bicycle theft
Insurers often add a janitor service to the package as well. This is provided by a professional – if a faucet is leaking, you can order a plumber at the expense of the insurer, and if the door is locked or the keys are lost – a locksmith. If you need to buy new parts to repair your pet, you must pay for them out of pocket in standard insurance policies.
In some cases, however, insurance companies go one step further and reimburse the costs of calling in a specialist (locksmith, plumber, electrician, etc.).) also cover the reimbursement of the cost of spare parts necessary to provide the service.