What is insured and how much does it cost?

Homeowners insurance covers damage to your home. You should pay close attention to the risks that are insured. Why this insurance is so important and what you should know.

Often the largest part of the resident’s property lies in the house – which is why it is all the more dramatic when the home is destroyed. This is a danger that looks unlikely at first glance, but the flood disaster in July 2021 has shown that even houses that appear stable and secure at first glance can be seriously damaged by unforeseen events.

Of course, no one can insure themselves against the great psychological stress that the loss of one’s own four walls brings with it. But you can protect yourself against financial problems with homeowners insurance. We’ll show you what you should know about it.

What is insured in residential building insurance?

In the Homeowners Insurance it is important to distinguish between basic protection and elementary protection. There are three components to basic protection:

  1. the protection against Fire – i.e. against damage caused by fire, lightning, explosion or smoke damage.
  2. the coverage of Tap water damage, for example in the event of a water pipe burst or if heating and air conditioning systems cause moisture damage.
  3. the protection against damage by Storm and hail. As a rule, storm damage from wind force 8 is covered.

Some insurers offer a kind of modular system for basic protection. This means that you put together your own insurance cover and can, for example, only opt for fire and storm protection if you want.

This has a positive effect on the annual contribution that you have to pay. However, there is also that Risk of underinsurance.

When elementary protection is important

But, be careful: Anyone who has taken out basic protection would still be faced with a large financial hole after a flood disaster. Because only that Additional module elementary hazards also covers damage caused by floods, earthquakes, snow pressure or volcanic eruptions.

While the latter is rather unlikely, floods caused by heavy rain events are becoming more and more likely due to climate change. Therefore, in future insurers only want to offer private homeowners policies that include elementary protection.

If you don’t want performance, you have to explicitly unsubscribe. That is in a position paper of the General Association of the German Insurance Industry (GDV). In addition, should New buildings in officially as a flood area listed areas can no longer be insured against floods, heavy rain or backwater from 2022.

Also cover damage caused by negligence

At first glance, the offers from home insurers seem very similar, but it’s worth it Compare offers. An example: not all insurers cover damage caused by negligence.

But you should pay attention to this, because a stove that you accidentally did not turn off can already lead to a devastating house fire. Damage to drainage pipes outside the property – which can quickly become very expensive – is not included in every insurance package.

How much does home insurance cost?

The insurers calculate the Homeowners insurance contribution based on the size, living space, construction, age, value and location of the house. If you live in a new building and not in a floodplain, you pay less than someone who lives in an old building directly on the river.

Favorable tariffs – including natural hazard protection – for a new house with around 140 square meters of living space can already be from 150 to 200 euros start, but there are hardly any upper limits to the contributions.

The location determines the hazard class

Especially the one Location of the house is decisive for the insurance premium – especially if you want to insure natural hazards. Insurers use a very specific system to classify how endangered a house is: the ZÜRS zones.

These Hazard classes are structured according to the statistical frequency of floods. There are four levels in total. ZÜRS zone 1 is very safe, there is statistically fewer floods there than every 200 years.

According to an evaluation by GDV, more than 90 percent of homeowners live in this zone. On the other hand, 0.5 percent of all houses are located in the most endangered zone – ZÜRS zone 4. Statistically, there is a flood there once every ten years.

There is often no insurance in zone 4

These zones are not even set for all eternity, but rather can change all the time. One more flood – and the statistical flood frequency within a certain period of time can increase, which can affect the ZÜRS zone. With consequences: Many insurers generally refuse homeowners in ZÜRS zone 4 insurance cover.

Integrated into ZÜRS are Heavy rain hazard classes. The highest hazard class includes objects that are located in the valley or near a stream. Buildings at the top of a slope or on a hilltop are least at risk. According to GDV, around twelve percent of all addresses are in the highest hazard class and 23 percent in the lowest.

Even if there is a uniform system with ZÜRS: Most insurers take other factors as a basis when calculating the premium for natural hazards. Therefore, a different contribution may be due for each individual address. In the GDV consumer portal “Die insurers” you can use the Natural hazard check for your zip code, find out how at risk you are.

Who Needs Home Insurance?

It exists no legal obligationto take out homeowners insurance, although this is discussed again and again after flood disasters. Still, you should urgently think about completing one.

Even if the federal government provided immediate and reconstruction aid to the victims of the floods in July 2021, strictly speaking, the 2017 Prime Minister’s Conference stipulated that state aid should only be given to flood victims if they had previously made sufficient efforts to obtain insurance cover themselves.

How homeowners can insure themselves

Homeowners are not the only ones who can take out homeowners insurance. Even Owner of a condominium can generally insure themselves – but with a little detour.

As a rule, all owners of the apartments in a property are also part of a homeowners association (WEG). This WEG can also decide whether or not to take out residential building insurance – the costs for the insurance are distributed to all WEG members via the house money.

Is home insurance a home insurance?

Imagine picking up your house, turning it upside down, and giving it a vigorous shake. What falls out is covered by home insurance. the Home insurance only applies to the building itself and its components. You can read more about household insurance here.

Can I deduct the contributions for tax purposes?

If you have your insured home inhabit themselves, unfortunately you cannot deduct the contributions from tax. Because unlike private health insurance, for example, residential building insurance is not one of the types of insurance that provides personal protection and provision. After all, you are protecting a real asset and not yourself.

However, if you have a Room as a home office use, for example, because you are self-employed, you can claim the premium for homeowners insurance on a pro-rata basis. Use a complete Real estate for commercial purposes, you can of course deduct the full amount of the insurance.

Rent out the insured building, you cannot claim the contributions for tax purposes, but the residential building insurance is one of the apportionable ancillary costs. So you can pass the insurance costs on to your tenants – provided the policies do not conflict with the interests of the tenants.

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