Buildings insurance is one of the most important types of insurance for protecting a property - regardless of whether it is a house or a condominium. In the following guide, we will present you in more detail what is important when choosing the right policy, when building insurance takes effect and which risks are covered by it.
In principle, building insurance, which is also referred to as residential building insurance, is not compulsory insurance. Nevertheless, it is a very important instrument for protecting property, which should not be dispensed with in one's own interest. Building insurance is often an important prerequisite for even getting a building loan or other form of real estate loan from a bank.
When changing home insurance makes sense!
If the current insurance contract for building insurance expires in the foreseeable future, it always makes sense to opt for a new contract with more favorable conditions. Normally, in this case, the insured must give three months' notice if they wish to cancel. However, the exact deadlines always depend on the insurer and can vary - all information can be found in the contract. If the property is still in the middle of financing, the approval of the financing bank regarding the change of insurance is required. Here, too, there are certain deadlines that the insured person must comply with.
If the owner changes, there is always the possibility of changing the insurance company. Here the existing policy is transferred directly to the new owner so that there are no insurance gaps. But because everyone can of course decide for themselves whether they want to take out insurance for their property, new owners usually have four weeks from the date of purchase to look around for new building insurance.
Special termination rights always exist for building insurance if an insurer increases the premiums. It is also important here that a special right of termination applies for a maximum of four weeks. However, the right of termination is invalid if an increase in premium due to a drive in the construction cost index results in an improvement in service for the customer.
It is also possible to cancel building insurance after a claim has been settled. Here, too, there is usually a notice period of one month, which you should definitely find out from the insurer. Anyone considering changing their insurer must always find out about the applicable deadlines from the bank or insurer before acting.
What damage does building insurance cover?
Home insurance covers a variety of different types of damage. This primarily includes damage caused by fire, storm, hail, lightning, explosion or burst water pipes, which are automatically included in most policies. Other special events that can cause damage to the property are covered by what is known as elementary damage insurance. This applies, for example, to risks such as flooding, snow pressure, landslides, earthquakes or avalanches. The natural hazard insurance is not an individual insurance, but rather a kind of under-insurance that can be additionally booked as part of the building insurance.
Which damages are compensated by a building insurance
Normally, a building's insurance covers any damage caused to a house - if necessary, also the entire building. This may be necessary after a house fire, for example. The insurance also covers pipes, heating systems, house electrics and other elements.
Objects that are not directly connected to the building are usually not included in the insurance cover. Before taking out such insurance, it is very important to check whether it also protects outbuildings such as a carport or garage from damage. If this is not the case, you would be stranded in the event of storm or fire damage to the garage
and would have to bear the costs yourself. Furthermore, it must be checked whether there are concessions for low-energy houses or general new buildings. Building insurance often also covers heat pumps and solar or photovoltaic systems, which the owner must always take into account when comparing insurance.
How high should the sum insured be for building insurance?
An important aspect when taking out building insurance is choosing the right sum insured. It should be at least as high as the real value of the property. Because not all properties were built in the same year and the value tends to increase over the years, the so-called "1914 value" is used for the calculation. This is the only way that the value of a house, which increases over time, is sufficiently taken into account by the replacement value insurance. The "waiver of underinsurance" clause can only apply if the sum insured is high enough. This means that if the property is partially destroyed for any reason, the insurance company cannot reduce the benefits. Instead, it is assumed
How much does building insurance cover?
In principle, the insurer reimburses all amounts that have arisen as a result of damage to the building and are part of the scope of services of the building insurance. This includes demolition and clean-up expenses, the cost of building a new home, and more. Sometimes the insurer even bears the costs of precautionary measures that can prevent further consequential damage. It is important for landlords that the insurance company reimburses the loss of rent caused by the damage.
As already mentioned, the value in 1914 or the insurance value in 1914 also plays an important role. This is the so-called reconstruction value, which is used to adjust the compensation payments to the construction price index.
Based on the 1914 value, the annual price increase in the construction industry is added to calculate the value for reconstruction. If compensation is paid, the insured person is automatically paid a higher amount than the property would actually be worth. This ensures that the property can be restored to the same standard after the damage sustained as when it was first constructed.
Natural hazards insurance - what is it and why is it important?
The so-called natural hazard insurance must always be considered individually. It is not an individual policy, but an additional service that can be taken out as part of building insurance. Its range of services includes damage caused by natural events such as earthquakes, heavy rain or floods. Such a policy is particularly useful if you live in a region that is prone to such events. In Germany, the individual regions are divided into different risk classes. So if, for example, flooding occurs regularly near a river, the insurance premiums for owners of nearby houses will be significantly more expensive than in other places. In particularly endangered areas, the insurance company may even reserve
Insurers are increasingly offering a comprehensive one-stop service for their customers. This means that in the event of damage, the insurer takes over the control and organization of the maintenance and repair work on a property. In this case, the insured person does not have to make expensive advance payments themselves and make expenses for the renovation. This of course saves him a lot of trouble and money. In order to achieve this, the insurers usually cooperate with certain craft businesses, so that the damage can be repaired within a short time.
What happens to the building insurance in the event of a change of ownership?
In order to protect the owner of a property, the law stipulates that if the house is sold, existing building insurance is transferred to the new owner. After the new owner has been entered in the Grundbruch, the insurance company should also be informed immediately about the change of owner. The new owner then receives the relevant information from the insurance company. Now the owner can check for himself whether the existing insurance cover is sufficient for him or not. If this is not the case, he has four weeks to cancel the insurance and choose another insurance company.
Caution: If the previous owner has already paid the full annual fee for an ongoing contract, this period should be used if possible. Because taking out new building insurance would automatically result in a new annual premium. If possible, the change of insurance should be completed at the end of a payment period - such as at the end of a calendar year.
Tips for determining the correct sum insured
There are a number of factors to consider when determining the right home insurance premium. These include, above all, the value of the property, the size and distribution of the area in the house as well as its location. The surroundings of the property, the type of construction and of course the year of construction are also relevant. Factors such as the type of use of the house and whether expensive special equipment such as dormer windows, bay windows, a swimming pool or other special features are available must also be taken into account. If you take all these aspects into account, the sum insured can be calculated at the correct amount. In any case, it must be high enough to cover all reconstruction costs in the event of damage.
Which services are important when taking out building insurance?
Because there is now a large selection of different insurance policies and tariffs for building insurance, the question naturally arises for homeowners as to which services should be included in the policy. Above all, it is very important that the case of gross negligence is covered. It should also be checked in advance whether damage to lines and pipes caused by cracks or frost that is not in the immediate vicinity of the house is included in the policy. The range of services should also include chimney and overvoltage damage as well as costs for clearing up work caused by fallen trees. Even damage to the building caused by unauthorized break-ins can be covered by building insurance.
How to find the right building insurance for your property
If you are looking for the right building insurance, you should take the time to compare different tariffs. There are various comparison calculators on the Internet that can be used to compare all insurers quickly and completely free of charge. All you have to do is enter relevant data. These include, for example, desired services, the sum insured and other factors that should be taken into account when comparing. On the basis of this, the comparison calculator then evaluates the individual offers - and you only have to choose the best one. However, one should not only be guided by low premiums, because the most important thing is still that the scope of services matches individual wishes. The best insurance is of little use
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