When we buy home insurance, we are often tempted to go for the cheapest option because it appears that all policies are the same. But if you do not pay attention to the insurance cover, the cheapest policy can end up costing you significantly more than you think. Here are the most important nuances you should look out for.
What is the sum insured per square metre?
It is important to find out how much your insurer would pay if you had an accident in your house. For example, if your house has been damaged by fire and has to be completely rebuilt, it is important that the sum insured per square metre stated in the policy corresponds to the actual construction costs.
Sometimes the cheapest household insurance policies set this “upper limit” at a level that no longer corresponds to today’s market prices. For example, at 900 euros. This would mean that your insurer would pay up to 108,000 euros for the complete renovation of a 120-square-metre house. Any building expert will tell you that this amount will not be enough to restore your house to the way it looked before. So, you’ll have to raise the rest amount of money yourself.
As of May 2023, the average cost per square metre to renovate a property is 1,200 euros. It is best if the policy does not specify a certain sum insured per square metre but insures the property at replacement value. This means that in the event of a disaster, the insurer will cover the costs according to the estimate and the actual costs of rebuilding the house at the time of the disaster. This advantage is provided by the home insurance policies offered by SEB, which we provide together with If Insurance.
According to If Insurance, water leaks are the most common and costly risk to residential buildings. It is particularly important to include this risk in your policy because even if you have new piping and connections in your home, a flood can be “organised” by your upstairs neighbours, through a broken riser or a window left open in heavy rain at the worst possible moment.
Since the Covid-19 pandemic forced people to stay at home more often, it has become increasingly important to choose a policy that also covers various household risks. This is especially important for people who have an office in their home or have young children.
For example, not all insurers will be very sympathetic if you ask for reimbursement for a broken computer that you accidentally knocked over a cup of coffee in the morning rush. Or paying for a broken induction cooker which was damaged by a top of a pan when you were cooking dinner. By choosing home insurance with SEB and additionally including the risk “Belongings“ in the policy, you will not have to worry about such household accidents.
No worries about tenants
If you use the property not only yourself but also rent it out to others (both short-term and long-term), it is definitely worth taking out a policy that provides additional cover for the landlord’s risks.
Most standard policies do not offer this option. So, if the short-term tenants trashed the place after the party or the long-term tenants “took” your appliances when they moved out, it can be very time-consuming to replace the damages.
If you opt for home insurance with SEB and also include “landlord risk”, you will be compensated both for the actions of negligent tenants up to an amount of 15,000 euros and for the loss of profit from rental payments if an insured event occurs in the flat that makes it impossible to rent it out during the renovation period.
Think about your belongings
When you decide to insure your belongings, insurers sometimes ask you to group and list the objects and items to be insured. As we buy more and more goods over time, this list can quickly become outdated if you fail to inform your insurer of your purchases each time.
To avoid being refused reimbursement for an item you have not listed, we recommend that you choose policies with insurers who do not ask you for this information. SEB household insurance policies, for example, do not ask for such a list when you take out life insurance.
In addition, items intended for use outside the home are also covered. This can be especially useful if you commute daily with your bike, as you will receive compensation if the bicycle was stolen by a thief.
Damages caused to others
Sometimes our house or its occupants can unintentionally cause damage to the other people. A couple of examples: a water pipe bursts in your flat, which also seeps into your neighbour’s flat. Your four-legged friend gets scared on a walk and bites a passer-by. Your children happen to scratch your neighbour’s car while playing.
If your household insurance does not include third-party liability insurance, you may have to pay for the damages caused by such accidents out of your own pocket. So, it is definitely worth considering this risk when choosing a policy.
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