It is important to protect your house and your household. Everyone likes to tell themselves that they are careful enough and that this cannot happen to them, but we cannot influence some situations. So let's take a look at the difference between the two most common types of insurance, home insurance and property insurance.
What is property insurance?
One of the things to think about when buying a property should also be insurance. By the phrase property insurance we mean not only the property itself, but also the components that are permanently attached to the walls, such as walls, windows and floors. Property insurance protects:
Apartment or family house
Housing unit (apartment)
Recreational building (cottage, cottage)
Garage, garage box or garage space
Outbuildings and other ancillary buildings
Apartment insuranceYou should not underestimate the insurance of an apartment , house or any real estate., house or any real estate should not be underestimated.
What is home insurance?
Home insurance , in turn, protects the movable property that makes up the equipment. Applies to:
furniture
light fixtures
carpets and home textiles
household electrical appliances - white goods (fridge, stove, washing machine...)
technical devices (computer technology, audiovisual technology, antenna systems, film and optical devices, cameras)
valuables (precious metals, precious stones)
art objects, antiques, collections
money, deposit and check books, payment cards, securities
personal items (clothes, shoes)
tools and equipment related to the hobby
sports equipment
other movable things (books, toys, cosmetics, food)
movable things located in non-residential premises, but belonging to real estate or a household
How do these insurances protect you?
Insurance products offered by individual insurance companies usually differ in prices, terms and scope of coverage. These natural or man-made perils are usually covered by any home and property insurance.
flood and inundation
tap water
fire
explosion
direct lightning strike
whirlwind
hail
weight of snow or avalanche
landslide
collapse of rocks and soils
smoke
eruption
earthquake
falling trees
falling masts or other objects
car crash, aerodynamic bang
the collapse of the aircraft or its parts
burglary or robbery
vandalism
However, the situations in which the insurance will protect you are precisely defined. Make sure that you are also insured for situations caused by your own fault. Protection against damage caused by own fault is not a standard that would be included in basic insurance.
Property insurance liability
This is damage that you have caused to someone else's property and that is related to your property. Situations where you overheat your neighbors or cause a fire that damages their property are common and it is good to be prepared for them.
Liability for home insurance
This responsibility includes the responsibility of all household members, even pets. These are damages that you cause during normal life activities. Unintentionally, of course.
Which insurance to choose?
The question of which of these insurances to choose is not correct. The right question is why choose both. Both insurances are needed to truly protect your assets.
For example, in the event of a fire that destroys your kitchen table, chairs and parquet floors, you want the insurance to cover all of these items. However, the parquet floors are part of the property insurance and the table and chairs are included in the household insurance. Both of these insurances only rarely overlap.
Why take out both insurances in one insurance company?
The only reason to take out insurance in different insurance companies is the price. However, taking out both insurances in one insurance company will not only be easier from an administrative point of view, but the conditions should also complement each other.
How to proceed in case of damage to your property?
Document it
First of all, secure the place where the damage happened to prevent the damage from increasing. Then get the documentation right away. Record videos and take photos. Try to do as many as possible and from every angle.
Contact the insurance company
Report an insurance event immediately. In the age of modern technology, it is up to you whether you call the insurance company, fill out an online form or prefer a personal visit to the insurance company.
Inspection
You will arrange an inspection date with the insurance company. This will take place in the severity of the damage. If the damage is minor, the insurance company will agree an inspection date with you in advance. In case of major damage, the insurance company will carry out an inspection almost immediately.
Completion
Complete all documentation and submit it to the insurance company. The insurance event is then registered, the insurance payment is calculated and the insurance event is closed.
What to insure?
The following items are usually not included in standard insurance, however these events can occur and it is good to be protected against them.
indirect lightning strike, overvoltage
rainwater
water leak
power failure and subsequent damage to the home
glass breakage insurance
electric motor short circuit, motor burning in domestic electrical appliances
automatic washing machine insurance
insurance as an extension of the warranty on household electrical appliances
insurance for bikes stored outside the apartment (e.g. in the basement)
Underinsurance and reinsurance
What is underinsurance?
Underinsurance occurs when the sum insured does not correspond to the value of the property, but is lower. In the event that an insured event occurs, you are at risk of a low payment that does not cover the value of the damaged property.
What is reinsurance?
You will encounter reinsurance if your repayment is disproportionately high. The insurance company will cover the event for you only up to the amount of the property. All the money you put into insurance beyond the limit is completely useless.
Both of these phenomena are undesirable. So make sure that the price of the insurance is proportional to the value of the property. To avoid these situations, it is important to check and update your insurance every year. Among other things, the increasing price of real estate has an effect on the correct insurance amount. It is precisely because of this that it is a fairly common practice for real estate to be underinsured.
Conclusion
Different insurance companies provide different products at different prices. It is understandable that when buying a new property and often repaying a loan, your finances are strained and you are afraid of burdening your budget with additional expenses. Look at tips on how to pay off the loan earlier or focus on other ways to save. However, don't underestimate insurance. Potential damage to real estate can reach millions of crowns.