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Securing your home properly – Important insurance policies for homeowners to protect their property in the event of a claim
Securing your home properly – Important insurance policies for homeowners to protect their property in the event of a claim
Whether fire, water, storm, or hail: the list of potential damage that can occur to real estate is long. Therefore, sufficient insurance coverage is essential for owners. Although the law does not obligate homeowners to take out insurance, every owner should definitely obtain at least a certain basic protection. We investigate the question of which insurances are important and useful for one's own property.
Absolutely essential for all homeowners: Home insurance
Property damage can quite quickly reach a five- or six-digit amount. Nobody just pays such a sum out of their savings on the side. Therefore, the associated residential building insurance is primarily the most important of all insurances. How expensive it turns out to be depends on the one hand on the value and on the other hand on the location of the property. It insures the house itself as well as all objects that are firmly connected to the building, e.g. heating systems, fitted kitchens, but also garages or garden sheds. Covered are causes of damage by Fire, tap water (e.g., due to burst pipes), as well as storm and hail. Therefore, residential building insurance is the most important insurance for homeowners.
It is important, to clarify precisely before the start of the insurance, which items should be co-insured. The cheapest rate is not always advisable, but rather one that includes worthwhile coverage extensions, such as the Solar panels of a photovoltaic system on the roof, which can suffer damage in the event of hail and severe weather.
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What happens if your house is completely destroyed?
Answer:
Should your house unfortunately burn down completely, the insurance will step in in such a case and support you with the reconstruction. You will receive the so-called replacement value of your house. This means that the insurance covers the costs for a new house similar to the old one, based on current prices. This covers not only the pure construction costs, but also the architect's fees and the expenses for planning and construction.
However, there is one important rule: you must begin reconstruction within three years in order to have this replacement value reimbursed. Since you can no longer live in your house after such damage, it is advisable to take out insurance that also covers the costs of temporary housing while your home is being rebuilt.
Natural hazard insurance: Protection against the whims of nature
Imagine your home is damaged by a severe storm—heavy rain, flooding, or even an earthquake. This is where natural hazard insurance comes into play. It acts like a protective shield against financial losses caused by natural events. This insurance covers damage to your house and property caused by various natural hazards:
- Heavy rainfall, floods and backwater
- Flood
- Snow pressure
- Avalanches and landslides
- Sinkholes
- Earthquake
- Volcanic eruptions
If damage occurs, you as a homeowner bear a small part of the costs yourself, as a deductible is usually agreed upon. This insurance is an additional module that you can add to your home insurance or contents insurance. It is often already offered within these policies. If you do not want this protection, you must actively opt out of it. The extended natural hazard insurance covers important costs if your home is damaged. These include:
- Repairs to the house and outbuildings such as garages or sheds.
- Drying and renovation of the building.
- If necessary, the demolition and rebuilding of an equivalent house.
- The costs for alternative accommodation, if your house is temporarily uninhabitable, can also be covered.
Especially with older home insurance policies, this coverage is often not included. This can become expensive in the event of a claim. Therefore, it is wise to review your insurance and make sure that it also protects you against damage from natural hazards. This helps you avoid having to bear the costs yourself in an emergency.
Liability insurance for homeowners: Simply explained!
For owner-occupied real estate
If you live in your own house or apartment and do not rent out any parts of it, private personal liability insurance is essential. It protects you in case you unintentionally cause damage to other people. A few examples:
- Someone slips on a slippery floor in your apartment.
- A passer-by falls in front of your house due to black ice.
- A flower box that you did not secure properly falls down and damages a car.
- A ceiling lamp installed by you falls down and injures a visitor.
In all these cases, private liability insurance steps in. Your spouse and minor, unmarried children are usually also covered.
For rented properties or larger residential complexes
If you own a property that you rent out or do not live in yourself, a landlady/landlord liability insurance policy is necessary. As an owner, you are responsible if third parties suffer damage or injury due to your property. The insurance covers damages, for example, if someone falls because of a loose paving stone, slips on icy paths, or is injured by falling trees or falling icicles. If you live in your house yourself and have personal liability insurance, you normally do not need this additional insurance.
Who needs property owner's liability insurance?
- Owners of apartment buildings
- Landlords of single-family homes
- Owners of vacant land
- Owners of single-family homes with granny flats, if more than three rooms are not used personally
- Condominium owners in an owners' association. Here, the insurance only covers risks originating from the owner's own apartment, the associated cellar, and any private parking space they may own.
Because if damage occurs on the property, the owner is liable. This can become especially expensive if people are injured, for example due to icy conditions. In this case, pain and suffering damages and medical treatment costs apply; in the worst-case scenario, it can even result in the insurer having to pay a lifelong pension. Homeowners who live in their own house already have this covered by their personal liability insurance.
The Home and Apartment Protection Letter: Your savior in times of need
The home and apartment protection letter is like a reliable helper that is quickly on hand in an emergency. If, for example, you lock yourself out of your house or apartment, the protection letter helps you. It ensures that a locksmith comes and opens the door. The insurance covers the costs for opening the door and, if necessary, for a temporary lock. But the protection letter can do even more: Imagine your drain in the bathtub or kitchen is clogged. No problem – the insurance organizes and pays for the pipe cleaning. This also applies to problems with your heating, water pipes, or electrical system. And if you need to get rid of unwanted guests like silverfish, moths, or mice, the protection letter covers these costs as well. Even the removal of wasp or bee nests is covered. The home and apartment protection letter is usually offered as an optional add-on to your household contents or residential building insurance. It can be compared to roadside assistance added to a car insurance policy. Please note that there may be a maximum limit that the insurance covers per claim.
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Home contents insurance: Your protection for personal belongings
Home contents insurance is like a safety net for the things in your home – from furniture and clothing to electrical appliances. It offers protection against damage that can be caused by various causes:
- Fire
- Lightning strikes, explosions, or implosions
- Burglary and theft
- Storm (from wind force 8) and hail
- Tap water
- Overvoltage
You can extend your coverage, for example with additional options against bicycle theft. What does home contents insurance actually cover in concrete terms?
- It pays the replacement value for stolen or broken items. This means you receive enough money to buy a new, equivalent item at current prices.
- It covers the repair costs for damaged items.
- It also compensates for the loss in value if a damaged item is still usable.
An important tip: Adjust your sum insured! Your household contents change over time, and expensive new purchases or valuables such as jewelry should be taken into account in the sum insured. Regularly check whether the agreed compensation still matches your possessions. Otherwise, you risk not being reimbursed for the full value in the event of a claim – this is known as underinsurance.
Legal protection insurance is especially advisable for real estate landlords
He who Real estate rented out, should consider legal expenses insurance. Disputes with tenants occur often enough and not infrequently end up in court. This also applies to disagreements with other condominium owners or neighbors. Here, the help of appropriate advisable for specialists. Legal costs in lost cases can amount to large sums even with lower amounts in dispute. Appeal proceedings can also drag on and prove costly. Therefore, it is worthwhile to take out legal expenses insurance or join an interest group that also offers legal protection.
Save sufficiently for financial emergencies
Purchasing real estate involves an enormous financial burden for years to come. Anyone who takes out a large loan should definitely protect themselves for bad times. This is possible through a disability insurance. Therefore, in an emergency, if the job is lost, the house does not also have to be given up. Another alternative is a Term life insurance. Thus, in the event of death, no financial risk for the surviving dependents in the form of a mountain of debt. A special form of term life insurance is the credit life insurance In the event of death, illness, inability to work, or unemployment, the construction or mortgage loan is fully or largely assumed, or the installments still due are paid. This type of insurance is frequently offered directly in combination with the construction loan.
Always check the conditions of insurance coverage
It is advisable to compare multiple offers. Especially with household contents insurance providers, there are huge price differences, because Germany is divided according to risk zones. Thus, insurance premiums for real estate in major cities are much more expensive than in rural areas. In addition, an exact Review of insurance terms and conditions take place, meaning what is covered by the respective policy. This prevents nasty surprises in the event of a claim.
Purchase and Sale of Residential Property: Important Insurance Aspects for Homeownership
When selling a house or an apartment, the existing building insurance is automatically transferred to the buyer – including all rights and obligations. For the insurance period in which the sale takes place, both the buyer and the seller are jointly responsible for paying the insurance premium. It is therefore advisable for the buyer and seller to clearly agree (and put this in writing) on who will pay which portion of the premium. The buyer has the right to cancel the insurance. This cancellation can take effect immediately or at the end of the current insurance period. Important: The right of cancellation expires if it is not exercised within one month of the official change of ownership (entry in the land register). The consent of any mortgage lenders is required for cancellation. Therefore, obtain this in good time. Consent cannot be denied if you can prove you have equivalent insurance coverage.
How does an insurance contract end?
Answer:
- Insurance policies with a fixed term can be canceled at the end of this term.
- For contracts with a duration of more than three years, there is the option to terminate at the end of the third year or any subsequent year.
- The cancellation must generally reach the insurer three months before the end of the contract.
- A special reason for termination is not necessary.
If you do not cancel, the contract will automatically renew for another year. After that, you can cancel every year, observing the 3-month notice period. You can also cancel after a premium increase or after a claim has been settled, provided that the insurance coverage has not improved.
As experienced real estate agents When selling real estate, we ensure that all necessary insurance policies are taken out and maintained. We inform both sellers and buyers of their rights and obligations to ensure that the sale or purchase of the house is secure with regard to the necessary insurance as well.
What costs must owners expect in order to insure their property?
Answer:
The costs are influenced by various parameters, therefore it is not possible to state a reliable cost amount for adequate coverage. The Year of construction of the building, living space, number of floors, use, construction class, sum insured are factors that affect the cost contribution. In addition, the increase in the value of the house is factored into the insurance premium. This means that the annual premium increases if the value of the house rises.
How do I secure the heat pump against damage and theft?
Answer:
Many homeowners nowadays invest in heat pumps, which often cost up to EUR 20,000. It is particularly frustrating when these expensive devices are damaged or even stolen. Heat pumps, which are usually installed outside the house, are unfortunately a popular target for thieves. So what happens if your heat pump is damaged or stolen? Who pays in such cases?
Often, damage to heating systems is covered by residential building insurance. But beware: Because heat pumps are installed outdoors, they are not always automatically included in your residential building insurance. There have been cases where insurance companies did not cover the damage because the pump was not located inside the building itself.
How does an insurance contract end?
Answer:
1. Check your home building insurance: Find out whether your heat pump is co-insured and which damages are covered by the protection. Since the theft of externally mounted heating systems is not an everyday occurrence, you should explicitly ask about this.
2. Report changes to your insurance: Notify your insurance company if you install a heat pump. This is important because it is a structural modification. Have the adjustment of your contract confirmed in writing.
3. Note any new conditions: If the insurance company adjusts the coverage, the premium may increase. In addition, the insurance company may require you to take additional security measures, such as a fence, an alarm system, or an elevated installation of the pump, to make theft more difficult.
4. Regular review: It is advisable to review your home insurance every few years and adjust it if necessary to ensure you always have the appropriate coverage.
Which property insurances are useful for builders during the construction phase?
Answer:
Building a house involves high costs because a property represents a great value. In addition, the builder bears the responsibility for safety on the construction site. Therefore, it is important to be aware of potential risks and possible damages even before constructing a house. Therefore, it is recommended that builders inform themselves in good time about possible insurances that can be useful to them during the construction phase. First of all, this concerns the Builders' liability insurance. With the client liability insurance, the builder protects themselves against property damage and personal injury on the construction site. It is necessary even if you have a turnkey building constructed and hire external companies. Insurance coverage is required until the completion of the building and final acceptance.
Other insurances that are relevant for the construction phase: construction works insurance, builder's liability insurance, new building insurance, construction helper accident insurance, shell fire insurance, and owner's and landholder's liability insurance (for vacant land).
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