How do I take out buildings insurance?
What is underinsured?
If you are underinsured, you will never be paid the full amount in the event of a claim.
Underinsurance means that the amount you are insured for is too low. The damage is paid pro rata. The amount of compensation depends on the insured amount in relation to the reinstatement value of the house.
Suppose you have a building insurance for €150,000 and the reinstatement value is €300,000, then you are insured for 50% of the reinstatement value. In case of damage, you will only receive 50% of the damage amount, regardless of the damage amount.
You can prevent underinsurance of your building by accurately determining the reinstatement value with the help of the reinstatement value meter. It is advisable not only to use the reinstatement value meter when purchasing building insurance but to fill in the reinstatement value meter again every 5 years. This is to maintain the guarantee against underinsurance. If you move house, you will also be asked to do this.
How is the premium determined?
When determining the premium, material and moral risk factors are weighed. The insurer looks at the construction, age and state of repair of the home. Furthermore, the region and the buildings in the vicinity of your home are considered. For example, if you live next to a pub or petrol station, this could mean that you pay more in premium.
When taking out a building insurance policy, you can continue to choose from 4 types of coverage:
- Fire cover. This is the most limited insurance.
- Comprehensive risk coverage (UGV)
- Comprehensive risk coverage plus (UGV+)
- All-risk cover. This is the most comprehensive cover.
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