Exclusions differ from one insurer to another, and checking them is part of our work before we recommend a policy to you.
A pipe bursts under your bathroom tiles and water gets through into the flat below. Your own damage to floors and walls is handled under the escape of water cover, and the damage downstairs under third party liability cover, if you have agreed it. Without that part of the policy you pay for your neighbour yourself, and that bill is often bigger than your own.
The flat is insured for a sum set back in 2015, but it has been renovated since and is worth considerably more. If the sum insured is lower than the real value, the insurer applies the rule of proportion and pays only part of the loss, in the same ratio as the sum to the value. That is why we always check at renewal whether the sums are still realistic.
The owner insures the property while the tenant insures their own belongings and their own liability, because the policy of the owner as a rule does not cover things that belong to somebody else. When nobody clears this up in advance, after a loss it turns out the flat was covered but the furniture and electronics of the tenant were not. With rented flats we set out clearly who insures what and where the covers overlap.
The examples are illustrative and show how the cover works in practice.
The basic cover includes fire, lightning strike, explosion, storm and most often escape of water from installations affecting the structure of the flat. Household contents, burglary, glass breakage and liability towards neighbours are added as extra covers. The scope differs between insurers, so comparing the terms matters more than comparing the price.
Not in the basic package. Flood and torrent are natural disasters and are added separately, usually with a deductible and after the location of the building has been assessed. Escape of water from plumbing or sewage installations is a completely different risk and it is a standard part of most policies, which is why the two are so often mixed up.
Earthquake is a separate risk that is paid for on top and it is never included automatically. Insurers write it with their own deductible, calculated as a percentage of the sum insured, so smaller losses stay with you. If that risk matters to you, ask for quotes with and without earthquake so you can see what it really costs.
Underinsurance means the sum insured is lower than the real value of the building or of the contents. In that case the insurer pays the loss proportionally, so even with a small loss you receive only part of the amount. It usually happens when a policy is renewed for years without changing the sum, even though the property has been renovated in the meantime or building costs have gone up.
The owner insures the property, meaning the structure and everything permanently built in. The tenant insures their own movable belongings and their liability towards the neighbours and the owner. If the flat is rented out furnished, it should be clearly agreed whose things are whose and in whose name they are insured, because after a loss that is hard to prove.
Send us a short enquiry. We collect offers from every insurer that covers this risk and explain the differences before you sign anything.
