Homeowner insurance

In this article, we will take a closer look at the coverage provided by homeowner insurance, whether homeowner insurance is mandatory, which parts of a building are covered by homeowner insurance, as well as the cost of insurance.

Homeowner insurances usually cover damage caused by house fires, storms, frost, and sudden water damage. However, insurance companies offer a range of additional coverages. These may include legal aid, wiring, extended water and piping coverage, as well as damage caused by insects, mold, or rot. The exact coverage of a specific homeowner insurance plan is stated in its policy and terms. As a policyholder, it is therefore important to carefully read the terms and conditions of a policy before signing an insurance agreement.

Which additional coverage you should choose depend on several factors, such as your temperament, finances, the type of home you live in, and the coverage you need.

If you plan to take out a loan on a house, homeowner insurance is legally mandatory. Mortgage banks require you to take out homeowner insurance covering fire damage. The property is provided as security for the loan, and the financial institution/mortgage bank wants to ensure that this security remains intact. If you’ve purchased a house, and are about to have the keys handed over, you must therefore be able to document that you’ve taken out homeowner insurance covering for, as a minimum, fire damage. If you don’t plan to take out a loan on the house, it is still recommended that you take out homeowner insurance coverage, for damage caused by, for example, fires, mold, insects, rot, and for legal aid, etc., as this will put you in the best possible position. In this way, homeowner insurance is mandatory in the event of taking out loans, while change of ownership insurance isn’t legally required.

Home insurance does not cover damage such as:

Damage caused by lack of maintenance.

Corrosion of visible water and heating pipes.

Foundation damage to the house that has developed over a long period of time.

Damage caused by faulty construction.

The insurance terms and conditions may include additional exceptions.

When insurance companies make a quote for homeowner insurance, they base it on information registered in the BBR notice. If you’re building, for instance, a new garage, or if you notice that the garage isn’t listed in the BBR notice, you must make sure to notify the insurance company. Otherwise, the garage, in this example, won’t be included in the insurance. The insurance policy will state all buildings covered by the insurance.

The price of homeowner insurance will vary depending on the insurance company, the size of your house, the coverage you need, whether you have a high insurance excess level, whether you can get discounts through, for instance, your trade union, the number of policies you wish to bundle in one insurance company, the construction materials of your house (e.g., it is cheaper to insure a house with tile roofing than thatch roofing due to greater risk of fires), previous damages, etc.

In the unfortunate event of damage to your house, the damage will be covered by “new for old”. In other words, the old parts that have been damaged will be replaced with new parts. If roof tiles fall off during a storm, for instance, you will be entitled to new roof tiles. However, the exact coverage, as well as any exceptions to the insurance coverage, will be outlined in the terms and conditions of the insurance policy.

• When taking out homeowner insurance, it is important to be critical and not just opt for the first quote. Make sure to gather quotes from various insurance companies to find the best possible comparative option. There can be great variations in price, coverage, and insurance excess.
• When purchasing a home, you will be offered the option of signing a change of ownership insurance. It is recommended to take out homeowner insurance and change of ownership insurance from the same company so as to prevent any back-and-forth issues arising between two different insurance companies. Read more about change of ownership insurance here.
• Make sure to read the terms and conditions of the policy carefully before signing an insurance agreement.
• If you bundle several insurances in the same insurance company, you will likely be able to obtain a bundle discount.
• If you make any changes, such as an extension, to the house, you must notify the insurance company.
• In the event of sudden damage, such as broken water piping, you must limit the damage as much as possible and then contact your insurance company.
• When gathering insurance quotes online, you have a 14-day right of withdrawal from the time and date you receive the insurance policy. Within this period, you can cancel the insurance free of charge.