What to do when homeowners insurance gets too expensive?

homeowner's insurance-too expensive

Buying a new apartment or house is a significant financial outlay, so it's not surprising that young property owners want to save first after making such an investment. Homeowners insurance is out of the question for many young homeowners. For some homeowners, insurance premiums are also becoming too expensive. This is why it is voted out in some cases. Is that so clever? Not everyone needs household insurance?

Insurance is very important

When buying an apartment on credit, we usually limit ourselves only to the insurance policies imposed on us by the bank. We are talking here about the building insurance, d. h. insuring real estate against fire, natural disasters and similar risks and, of course, life insurance.


Brief explanation of building insurance: building insurance guarantees that in case of fire or complete destruction of the financed house, the insurance company will pay out the amount of the loan taken under the so-called assignment agreement.

Simply put, if a house is destroyed, z. B. by a flood or lightning, the insurer will transfer the entire amount paid to us under the mortgage to the bank's account. The cost of such insurance is usually low. Insurance companies calculate it based on the market value of the purchased property.

For example, the premium for such insurance for a house worth 250.000 EUR about 250 EUR per year. However, this is only a rough guide. The exact cost of insurance depends on the scope of services provided by the policy and other parameters.

For some banks, it is also important to insure the life of the borrower, which is why some of them require this form of collateral from their customers. It is important to have a well-calculated and constructed life insurance policy, because it is a financial protection of one's family.

Homeowner's insurance costs – Choosing the right amount of insurance

The sum insured for which the household effects are insured is the upper limit of the insurer's liability. Therefore, the sum insured should correspond to the market value of the house contents. If the household goods are destroyed or bspw. Lost due to burglary, the owner receives funds that allow him to repurchase equivalent household goods.

Note: If your home insurance has become too expensive for you, you should do an insurance comparison and compare your existing policy with the policies of other insurers. To do this, use the independent home insurance comparison on versicherungsriese.de.

When you decide to purchase homeowner's insurance, you can choose between two insurance options – insurance against actual value or replacement value. This is a big difference.

The first option is much more popular because it is cheaper. But in the case of total destruction, you can only rely on as much as the property was worth. The insurer deducts the so-called technical wear and tear, d. h. it deducts the value calculated according to the tables of technical wear and tear from the value as new.

Read the homeowner's insurance policy documents

There you will find all the exclusions, d. h. Situations in which we do not have insurance coverage. What are the exclusions? First of all, we should clarify what is always covered in a home insurance policy. Damage caused by the following influences/causes is insured:

  • Fire
  • Tap water
  • Lightning strike
  • Storm and hail
  • explosion and implosion
  • Burglary

It is worth checking whether we can cover the so-called hose damage, d. h. caused by the breaking or detachment of water-carrying hoses to the washing machine or dishwasher, are compensated for. In addition, we should read in the insurance documents, whether a burglary is also insured, if the door was only fallen into the lock, so was not locked.

Note: In order to determine the direct cause of water damage, the insured must sometimes z. B. open a part of the ceiling, floor or wall, which involves additional costs. The insurers will only cover these costs up to a certain amount. Usually it is a few thousand euros. Finally, the so-called deductible (excess) should be emphasized. This is the value up to which no compensation for possible losses will be reimbursed.

How likely are damages to the house contents?

Most often we use insurance because of floods (77%). Burglary was experienced by 18% of respondents. 9 percent experienced fire and 7 percent devastation. Damage due to electrical overvoltage was complained by 3% of the insured and as a result of the storm – 3%. Insurance does not usually cover theft of items such as payment cards, documents, manuscripts. You are also hesitant to pay for damaged jewelry, computer equipment, photographic equipment or other rare and valuable items when making a claim.

How to protect yourself from this? – If you have items of artistic or historical value (paintings, furniture, sculptures, coin collections), make sure they are insured at market value. They are usually not insured at standard conditions.

To protect them, it is necessary to have special burglary protection measures and sometimes documents confirming their authenticity and origin. What happens when all electronics in the home are destroyed by a lightning strike or power surge? It all depends on what type of insurance policy we choose. Let's check the terms and conditions to see if we are insured for such a case.

What optional additional protection makes sense?

You can't insure against all eventualities. However, nowadays it is necessary to look more closely, because some risks are not included in the standard policies, although in fact one would assume that they are. The following is only insurable through optional additional protection:

  • Elemental damage
  • Glass breakage
  • Bicycle theft

Insurers also often add a janitorial service to the package. This is provided by a professional – if a faucet is leaking, you can order a plumber at the expense of the insurer, and if the door is locked or the keys are lost – a locksmith. If you need to buy new parts to repair your pet, you will have to pay for them out of pocket in standard insurance policies.

In some cases, however, insurance companies go one step further and reimburse the cost of calling in a specialist (locksmith, plumber, electrician, etc.).) also cover the reimbursement of the cost of spare parts needed to provide the service.