What is building insurance?
Building insurance in Switzerland covers damage to the policyholder’s building in the following circumstances:
1) Fire, smoke, lightening and explosions (covered separately by the state or Canton in most of Switzerland).
Damage caused by extinguishing water is not covered in the base coverage.
2) Water, gas or heating oil and damage caused by frozen and burst pipes. Also covered damage from the properties swimming pool water and sewage system.
3) Natural events (flooding, strong winds, hail, avalanche, weight of snow, land and rock slides…). Covered separately by the state or Canton in most of Switzerland. Damage to the façade is not covered.
4) Damaged caused to the building in the event of a burglary.
These damages are covered for the full amount defined in the building insurance policy (the amount required to reconstruct the building).
Important: Additional follow-up and loss prevention and location, exposal and disposal,costs are sometimes covered for as little as 10% of the amount defined in the policy or for fixed amounts as low as CHF 10’000.- Always pay attention to these benefits on your building insurance policy; there are notable differences between providers, always prefer the company that pays the most to avoid big financial losses. In Switzerland CHF 10’000.- is not sufficient.
Additional follow-up and loss prevention costs include emergency doors, locks, windows and other security measures, temporary housing solutions, removal and disposal of debris. Location, exposal and repair costs are only related to water related events such as burst pipes.
For policyholders who have gardens and or terraces all outdoor facilities, swimming pools, fences and vegetation must be protected with extended coverage.
For policyholders who rent out their property loss of rental income insurance can be added to the building insurance policy.
Damage caused by overvoltage is not covered in the base coverage.
Swiss building liability insurance
All owners should also subscribe to a building liability insurance in Switzerland which protects them in the event that anyone suffers injury or damage on their property. The only exception applies to an owner who builds a two or three apartment property and lives on site in one of the apartments and rents the other(s) out; this owner is covered by his personal liability insurance policy.
What is Swiss construction and construction liability insurance?
In Switzerland the owner of the land is always responsible for any problem that arises throughout the construction or renovation period. Construction insurance and construction liability insurance in Switzerland must be subscribed to for any renovation or construction project.
Without this protection the construction project can be seriously delayed if there is a problem and the owner can risk personal bankruptcy.
Contact our expert for further information; he can come to the building site with an engineer for risk appraisal.
What amount should I be covered for?
For building and construction insurance in Switzerland one must always be covered for the amount it would cost to reconstruct the building if it is destroyed, less the cost of the land.
Our expert’s recommendation:
Do not underestimate the building insurance amount to be covered as underinsurance is applied. Always cover additional follow-up and loss prevention for at least 20% of the insured amount. Always cover location, exposal and disposal costs for the highest amount available with the company you choose.
What deductible should I choose?
.Building Insurance in Switzerland
Minimum per event:
Fire, smoke, lightening and explosions: 0.-
Water, gas or heating oil and damage caused by frozen and burst pipes: 0.-
Damaged caused to the building in the event of a burglary: 0.-
Maximum: 10’000.-
Other: 200.- / 500.- / 1’000.- / 2’000.- / 5’000.- /
Natural events: 10%, minimum CHF 1’000.- / maximum CHF 10’000.-
Our expert’s recommendation:
For fire, smoke, lightening and explosions and damaged caused to the building in the event of a burglary the difference between CHF 0.- and 500.- is insignificant (generally less than CHF 15.- per year)
Our expert recommends a 0.- deductible for these risks.
For water, gas or heating oil and damage caused by frozen and burst pipes the difference between CHF 0.- and 500.- can be as much as 25% (of a yearly premium of roughly CHF 330.-), so this can lower the overall premium by as much as CHF 80.-
Our expert recommends a 0.- or 500.- deductible for these risks depending on the policyholder’s budget.
Additional follow-up and loss prevention insurance in Switzerland
Additional follow-up and loss prevention protection must be added per risk as extended coverage.
Minimum per event:
Fire, smoke, lightening and explosions: CHF 0.-
Water, gas or heating oil and damage caused by frozen and burst pipes: CHF 0.-
Damaged caused to the building in the event of a burglary: CHF 0.-
Maximum: CHF 10’000.-
Other: CHF 200.- / 500.- / 1’000.- / 2’000.- / 5’000.- /
Natural events: 10%, minimum CHF 1’000.- / maximum CHF 10’000.-
Our expert’s recommendation:
For fire, water and burglary related events additional follow-up and loss prevention protection should add less than CHF 2.50 per month to a building insurance policy. The difference between the CHF 0.- and 500.- deductible is insignificant (generally less than CHF 8.- per year). Related claims will also be smaller than the main risk claims, so a high deductible has limited benefits.
Our expert recommends a 0.- deductible for these risks.
Insurance law imposes a 10% or minimum CHF 1000.- deductible for natural event damage, so the policyholder has no flexibility for this risk.
Location, exposal and disposal costs insurance in Switzerland
Location, exposal and disposal costs must be added to the water related risk as an extended coverage.
Minimum per event:
Water, gas or heating oil and damage caused by frozen and burst pipes: 0.-
Maximum: 10’000.-
Other: 200.- / 500.- / 1’000.- / 2’000.- / 5’000.- /
Our expert’s recommendation:
For water related events location, exposal and disposal protection should add less than CHF 100.- per year to a building insurance policy. The difference between the CHF 0.- and 1’000.- deductible is insignificant (generally less than CHF 12.- per year). Related claims will also be smaller than the main risk claims, so a high deductible has limited benefits.
Our expert recommends a 0.- deductible for this risk which SHOULD ALWAYS be included in the policy.
Construction insurance in Switzerland
Minimum per event: CHF 1’000.-
Maximum: CHF 10’000.-
Other: CHF 2’000.- / 5’000.-
Our expert’s recommendation:
A higher deductible will lower the premium, so this can be considered as claims in construction insurance are generally high.
What value or amount is reimbursed in case of a claim?
Replacement value less the deductible. Underinsurance is applied to building insurance in Switzerland so the amount insured must be as accurate as possible to avoid financing reconstruction after serious damage.
Extended coverage that should always be included in building and construction insurance in Switzerland:
Building protection plan:
.Additional follow-up and loss prevention
Always include additional follow-up and loss prevention in your building protection plan to avoid costly collateral costs following a claim.
.Location, exposal and disposal costs
Always include location, exposal and disposal costs in your building protection plan to avoid major expenses following a burst pipe or damage caused by liquids.
.Home improvement
Always increase the insured amount on your building insurance policy when you invest in home improvement projects to be fully compensated in case of a claim.
.Outdoor facilities and vegetation
Outdoor facilities, swimming pools, fences and vegetation are not covered against fire and natural events in the standard building protection plan. To be compensated in case of damage be sure to add them to the protection plan.
.Extended Cantonal fire and natural events protection
In the Cantons that are covered by the Canton or state against fire and natural events it is recommended to add private extended protection to be fully compensated in case of a claim.
.Technical equipment
Always check that technical equipment (heating and cooling systems, fuse boxes, lifts, boilers etc) are protected in your providers standard building protection plan, if they are not they should be added through an extended protection plan.
Construction protection plan:
.Scaffoldings
Make sure all scaffoldings are covered in the standard protection plan for all construction or renovation projects.
.Land and existing facilities
Make sure the land itself and any existing facilities on the land (underground pipes or electrical lines) are covered in the standard protection plan.
Extended coverage that can be added to the building insurance plan in Switzerland:
.Recommended if you rent all or part of your property out
Loss of rental income
.Recommended if you live in a seismic zone
Protection in case of damage caused by an earthquake.
Examples of building, construction and owner’s liability insurance claims in Switzerland:
.A’s villa is struck by lightning and burns down.
A’s villa will be rebuilt at replacement value less the deductible. Underinsurance applies to building insurance so if the insured amount is too low A will have to personally finance part of the reconstruction.
.A is burgled. The burglar breaks a window to enter the house.
A’s building insurance will pay for the replacement of the broken window and will pay for the temporary emergency security window protection (often a wooden board) through the additional follow-up and loss prevention module.
.A’s water underfloor heating system has a leak.
The building insurance location, exposal and disposal costs module will pay for locating the leak, breaking the tiles and floor to repair the leak and retile the floor and to dispose of the old tiles and cement.
.A drills a hole in the wall while renovating his house and bursts a water pipe which floods part of the house and causes CHF 50’000.- of damage
The construction insurance will pay for the repair of the burst pipe and pay A CHF 50’000.- to compensate the damage.
.A enters B’s building site and falls into a trench and breaks his ankle.
B’s construction liability insurance will pay for the A’s medical, ambulance and loss of income expenses.
.A visitor slips on a patch of ice on C’s outdoor staircase and breaks her leg. C does not live in the building and there are multiple rental apartments in the building.
C’s building liability insurance will pay for the visitor’s medical, ambulance and loss of income expenses because the injury occurred on C’s property and the ice should have been removed.
If C owned and lived in the building and there were only two other rented apartments on site C’s personal liability insurance would have covered A’s claim.
Glossary of Swiss insurance terms – Building, construction and owner’s liability insurance
Additional follow-up and loss prevention costs
The additional costs directly generated by a claims event. They can include: emergency doors, locks, windows and other security measures, temporary housing solutions, removal and disposal of debris.
Location, exposal and disposal costs
Only related to water related events (water, gas or heating oil and damage caused by frozen and burst pipes). Leaks must be located, exposed, repaired and the waste disposed of.
Underinsurance
Underinsurance is the act of under estimating the true value of the risk to be insured.
This results in a lower annual insurance premium but will also result in the equivalent loss when a claim is made (“apply average” in insurance terminology). An example illustrates that the loss occurred from a claim can greatly exceed the saving on the insurance premium.
If the policyholder underestimates the value to be insured by 25% they will be penalized by the same amount (25%) if they make a claim:
Value declared: 40’000.- / real value 50’000 (underinsurance value 25%)
Claim amount / damage: 20’000.-
Compensation: 15’000.- (-25%)
To insure the extra CHF 10’000.- would have cost between CHF 20 and 25.- per year; the loss on the claim is CHF 5’000.-
Replacement value
The amount required to replace the insured item at today’s price.
Home improvements
If you renovate your home or add value to your property when you build it by a change of floor (marble, improved parquet…), improving the kitchen or bathrooms or by adding roof windows etc it will increase the value of your property stated on the original sales contract. The cost of these home improvements must be added to the insured amount on your insurance policy for them to be taken into consideration in the event of a claim.
