Property insurance: guarantee against underinsurance?
If you have bought a house and are going to take out the various insurances for your home, building insurance is indispensable in this list. With building insurance you insure damage to your home and its immovable property (property that is not movable, or united with the ground). It is important to take out a good home insurance policy so that your home is insured at its true value. This will prevent underinsurance of your home. How to prevent this. About this topic, building insurance in general and more; read in this article.
What are the different coverages of a home insurance policy?
Property insurance typically has four different coverages:
- Fire coverage, this is the least comprehensive insurance;
- Extended variety coverage (UGV);
- Extended variety coverage + (UGV+);
- All-risk coverage, the most comprehensive coverage.
These coverages pay out damages that can be caused by such things as: fire, water damage, storm (from wind force 7), lightning, burglary and vandalism.
When are you underinsured with homeowners insurance?
You are underinsured if the insured amount does not match the reinstatement value of your home. If you are underinsured, you will also be paid less in the event of a claim. You will only be paid for the damage that is proportional to the premium paid. Most insurers have a guarantee against underinsurance, but you should always check with your insurer. It is very important to read the policy conditions (in advance).
Suppose you have building insurance for €200,000 and the reinstatement value is €400,000, you are insured for 50% of the reinstatement value. In the event of damage, you will then only be reimbursed 50% of the damage amount, regardless of the damage amount.
How can you avoid underinsurance with home insurance?
In order to calculate the value of your home, the reinstatement value meter is often used. If you fill out the rebuild value meter properly and completely, you will be insured against underinsurance for the next five years (provided there are no changes in your situation). By means of a questionnaire in combination with your family situation, income, age and the size of your home; your insurer can make a good estimate of the value of your home. If, in the event of a claim, it turns out that the reinstatement value is underestimated, the insurer will take care of the underinsurance. It is especially important for you to fill in the reinstatement value meter correctly and truthfully.
It is wise to fill out the rebuilding value meter every five years. This is because the insurer provides a five-year warranty on the reinstatement value. In those five years a lot can change about your home. For example, if you have installed a dormer window or expanded your home, the reinstatement value of your home will also change.
What does buildings insurance exclude?
Insurers exclude disasters (catastrophe risks) from coverage. Intent and recklessness are also (logically) excluded from coverage. Recklessness in this case should include failure to maintain the home. Should a pipe need replacement and you neglect to repair it, the insurer will not pay out in case of leakage to this pipe.
Get your home insurance through Alpina: simple and affordable
Are you considering taking out building insurance? Then take it out now through Alpina! We have the right coverage for every situation. We offer competitive premiums. Do you have any doubts or questions about our building insurance? Feel free to contact our customer service. They are happy to answer all your questions.
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