Various Austrian newspapers reported as early as June 2018 that 71% of people in Austria wish to live in their own house. If you share this desire, but a new build is out of the question for you, there is the option of switching to buying an existing property. But without the right insurance cover for your house, a rude awakening can quickly follow. If damage occurs to or in the house, necessary repairs often exceed your own financial means. Think early about which insurance policies you need as a homeowner.
Why do you absolutely need residential building insurance?
Residential building insurance is the most important insurance for a homeowner. It offers financial protection in the event of small and large property damage to your home. The insurance cover also applies if the property is completely destroyed.
With residential building insurance – often just called building insurance – the basic cover protects against three hazards: tap water, fire, and natural hazards.
What damage does "tap water insurance" cover?
Residential building insurance protects you from the financial consequences of tap water damage. This includes damage caused to the house by tap water that has escaped in an unintended manner. If pipes or hoses burst, water can penetrate walls and floors. This promotes mold growth and, in the worst case, has a negative effect on the structural integrity of the house.
The "tap water insurance" kicks in if:
- the dishwasher hose is damaged and tap water spreads into the kitchen wall
- the heating system leaks and wet spots form on the walls
- a waterbed leaks and the flooring is damaged by the escaping water
- pipes inside and outside your house break due to frost
- frost damage occurs to radiators, sinks, or fittings
Some residential building insurance policies offer financial protection if rainwater downpipes running on your property break and damage the building.
What does "fire insurance" cover you against?
The fire insurance cover integrated into the residential building insurance applies to damage resulting from the following causes:
- lightning strike
- fire
- implosion
- explosion
The insurance also covers consequential damage caused by extinguishing work, smoke, and soot.
What natural hazards does residential building insurance protect against?
Natural hazards covered by most residential building insurance policies include hail and storm. The protection extends to consequential damage caused by wind gusts from wind force 8. If hail causes building damage, the wind force has no influence on the insurance cover.
Although building insurance protects you financially against many natural hazards, it usually does not cover damage from:
- groundwater
- flooding
- heavy rain
If such natural disasters occur, financial ruin can quickly follow without additional insurance cover. It is therefore advisable to supplement residential building insurance with natural hazard insurance. The latter covers damage caused by flooding and backwater. At the same time, it protects you against follow-up costs due to:
- snow pressure
- avalanches
- earthquakes
- subsidence
- landslides
Some policies offer financial protection in natural hazard insurance against the consequences of a volcanic eruption.
Why are contents insurance or household insurance important for homeowners?
Building insurance protects your private assets if damage occurs to the house. However, the insurance cover does not necessarily extend to the consequences of vandalism and burglary. You can protect your dream house and your wallet from such damage by taking out an additional module for your residential building insurance.
Alternatively, check whether burglary protection is included in another insurance policy necessary for homeowners.
Usually, contents insurance covers damage caused by burglaries. Many policies also contain fire, storm, and tap water insurance cover for your furnishings. In some cases, contents insurance additionally covers the follow-up costs resulting from fire and water damage, storms, or burglary. These include:
- hotel costs
- cleanup costs
- costs for changing locks
At the same time, the insurance cover of the contents insurance extends to lost household contents. This includes all items and valuables in your household.
What are the advantages of household insurance over contents insurance?
The insurance cover of contents insurance extends to all items that belong to your furnishings. At the same time, you use it to insure things belonging to your household that are intended for use and consumption.
Windows and other glass surfaces on the building are not part of the household contents. However, insurers offer the option of additionally insuring the so-called "glass risk".
You save these additional costs if you opt for household insurance. With this, the insurance cover includes glass breakage in addition to burglary, fire, storm, and tap water. Accordingly, you receive money from your insurance if:
- damage occurs to the building glazing
- art glass breaks
- aquariums, mirrors, shower cabins, or picture glazing are damaged
However, with glass breakage insurance, the name says it all. If the insured glass does not break – if there are only scratches or scuffs – the insurance does not pay.
In addition to protection against glass breakage, good household insurance includes private and sports liability insurance. This covers damage caused by:
- dangers of everyday life
- keeping small animals with the exception of dogs
- non-professional sports activities
The private liability insurance belonging to GRAWE's household insurance also covers follow-up costs if you occasionally use an electric boat or sailboat. The Graz-based insurance company GRAWE looks back on a history of around 200 years. It is now an international company that has opened 110 customer centers in Austria to date.
Why do homeowners need private liability insurance?
If you lack household insurance, take out separate private liability or house and property owner liability insurance. With the construction or purchase of a house and the associated land, you assume an important obligation. You must ensure that your land poses no danger to uninvolved parties. If you live in the property yourself, private liability is sufficient as protection. This applies if:
- a passerby slips on the leaves in front of your garden gate in autumn and gets injured
- a pedestrian falls on the ungritted sidewalk in winter or
- branches or an entire tree fall onto the neighbor's property and cause damage there
It is common for Austrian homeowners to rent out their property. In that case, house and property owner liability insurance replaces private liability insurance.
Which additional insurance policies are suitable for Austrian homeowners?
Building insurance with additional natural hazard insurance, contents insurance, and liability insurance are part of the basic insurance cover for homeowners. Which additional insurance policies you also take out depends on the situation.
Which insurance do you need if you are building a house?
If you decide to build a property on your land, builder's liability insurance is recommended. This protects you from financial consequential damage that occurs during construction work due to personal injury, financial loss, or property damage.
If a passerby falls into an unprotected construction pit, you as the landowner are liable if the person concerned is injured. If you have to pay damages, hospital costs, and possible rehab costs, you could face financial ruin. Builder's liability insurance protects you from this nightmare scenario.
Which insurance cover is suitable for owners of a photovoltaic system?
If a sustainable lifestyle is important to Austrian homeowners, they equip their property with a solar system. Although this brings advantages, it is a high investment. Accordingly, damage caused by operating errors or storms to the photovoltaic system is equivalent to a disaster.
Good photovoltaic insurance covers damage to the solar system caused by hail, storm, fire, and other natural events. At the same time, the insurance cover applies to:
- overvoltage damage
- material defects and
- design defects
Are you planning to expand your solar system over time? Then look for insurance with free system expansion.
When is legal expenses insurance worth it for homeowners?
As a homeowner, you can find yourself in situations where you need legal assistance. Possible examples are neighborhood disputes or rent disputes. If such serious disagreements lead to a court case, the legal costs will burden your budget. You can protect yourself against this with rental, housing, and owner legal expenses insurance.
In some cases, owner legal expenses insurance is a component of comprehensive private legal expenses insurance. Depending on the provider, this includes additional vehicle legal expenses insurance.
Before you decide to take out the insurance, check the insurable damages. Legal expenses insurance does not cover fines or penalties imposed on you.
Conclusion: Homeowners benefit from good insurance cover
If you fulfill your dream of owning your own home, it can quickly turn into a nightmare without the right insurance cover. Storms or fires threaten damage to the building and household contents. If your property poses a danger to passersby, high financial burdens will also come your way.
You can protect yourself against this if you, as a homeowner, take out at least building insurance, contents insurance, and liability insurance. If you value comprehensive insurance cover, supplement the three basic insurance policies with natural hazard insurance and household insurance.
