Financial tips column
Updated on September 27, 2024, 4:08 p.m
Homeowners insurance protects the owner of a home from the financial consequences of property damage. The entire home is insured, including all permanently installed items. © Getty Images/iStockphoto/Wasan Tita
For many people, their own house is their beloved center of life – and at the same time the most valuable possession they have. This makes it all the more important to insure your home well. “Finanztest” has tested residential building insurance and tells you how you can find good and cheap insurance.
This column represents Ulrike Sosalla’s view. Find out how our editorial team deals with opinions in texts.
Do you also feel uneasy when heavy rain and storms are forecast? How often have I checked the backflow valve in the basement when there was a significant low pressure area approaching. Not that I can tell if the flap is working properly – it just makes me feel better.
No matter how safe and secure you usually feel in your own home, sometimes you become painfully aware of how vulnerable it is in the landscape. The storm that lifted the photovoltaic systems from the roofs of two of our neighboring houses and threw them into the gardens will never be forgotten. In such a case, it is good if you have ensured in good time that the system is included in your home insurance.
Also read these financial columns
Most of the damage to buildings is caused by leaking tap water, but the images of destroyed houses caused by the floods in the Ahr Valley and North Rhine-Westphalia are burned into the collective memory.
Anxious question: Is my insurance enough?
Many homeowners wonder whether their homeowners insurance is enough – and if not, whether they can afford better protection. The question is legitimate. The Stiftung Warentest found in their current test Of 182 tariffs, 94 were very good policies – but there were also 57 poor ones.
Bad tariffs have sensitive gaps that can cost homeowners a lot of money in an emergency: For example, they do not pay for damage caused by gross negligence or do not include demolition and clean-up costs or hotel costs if the house is uninhabitable for a longer period of time after damage.
Urgently recommended: protection in the event of natural damage
What causes homeowners the most headaches is the natural hazard protection component – one of the four components of residential building insurance. The other three – fire, tap water and storm/hail – are covered by most insured people anyway.
In North Rhine-Westphalia, for example, 99 percent of residential building policies include protection against storm damage, but only a little more than half include natural hazard protection, which covers the consequences of floods, backwater damage, landslides and snow pressure.
There are two reasons for the reluctance: the costs and the problem of even finding insurance. Around 1.5 percent of the houses in Germany are located in the highly endangered zones Zürs 3 and 4. It can be difficult to insure yourself there, and if an insurer can be found, they often calculate a risk surcharge.
What are Zürs zones?
- The Zonation system for Üflood, Rbacklog and Starkregen (Zürs for short) enables insurance companies to assess the flood risk for a specific address. It includes data on more than 22 million addresses. The lowest risk class is 1, the highest is 4. (Source: Verivox)
Be sure to get multiple offers
The following applies to every house, regardless of its location: It definitely makes sense to compare tariffs. Expensive, very good policies cost three to four times as much as cheap ones – so it’s worth the effort to get several offers.
But how do homeowners find out whether their existing policy is good, sufficient or inadequate? In addition to the test, Stiftung Warentest has a checklist available: It is particularly important, for example, that a tariff also covers gross negligence, for example if a fire is caused by a pot being forgotten on the stove. Demolition and clean-up costs that may arise after a fire should also be included.
And another important tip: For older houses – and “older” in this case means any house that has been lived in for more than ten years – it can be difficult to find new insurance. If you want to change your homeowners insurance: Do not cancel until you have a new insurance contract ready to sign. Because even worse than incomplete insurance is: no insurance at all.
Sources used
About the author
- Ulrike Sosalla is deputy editor-in-chief of “Finanztest” and is therefore a recognized expert in financial matters.
- The consumer magazine “Finanztest” belongs to Stiftung Warentest, which has been testing financial services for 30 years. Test.de and “Finanztest” are completely ad-free and thus ensure absolute independence from banks, insurance companies and industry. You can subscribe to the Stiftung Warentest newsletter here.
Updated on September 20, 2024, 12:02 p.m
The anticipation for the 2024 Oktoberfest in Munich is increasing, but visitors will have to dig deep into their pockets because the prices at the Oktoberfest have also increased this year.
“This is how the editorial team works” informs you when and what we report on, how we deal with errors and where our content comes from. When reporting, we adhere to the guidelines of Journalism Trust Initiative.
