Imagine, the new house has finally been renovated, all construction work has been completed, you are on vacation and your house is being broken into because the security of your house is not yet working properly. That is not a nice idea from the ground up, but it becomes really problematic if your household effects were not (sufficiently) insured. With the help of good home insurance, you can protect yourself from high costs due to theft or damage and are protected in the event of a break-in. We’ll tell you when home contents insurance is really necessary, what damage and insured amount it makes sense to cover and what you should pay attention to when concluding a contract.
What is home contents insurance and what do you need it for?
With a home contents insurance – too Mobiliarversicherung called – you can insure all movable objects in your household, i.e. everything that is in your house or on the insured property at the time of damage. The principle is easy to explain. Ask yourself the following question: In the event of damage, such as a fire, you would have to buy all of your property in one fell swoop. In addition, you would have high repair costs to cover the fire damage to the house. Could you finance all of this at once?
Depending on the extent of the costs, hardly anyone could do that. For this reason, household contents insurance is one of the most important forms of protection for consumers, alongside liability insurance, and should be taken out. The home contents insurance covers repair costs and new acquisition costs for your stolen or destroyed items. The amount paid out does not depend on how much you paid for your possessions back then, but on how much it would cost you to buy these items again today. So she pays for the replacement value. It also compensates for a reduction in value if one of your items still works as before due to damage, but is now less valuable due to external defects.
Summarized: Household contents insurance covers the costs of new purchases, repairs and depreciation. It makes sense for every consumer, especially if many possessions have been damaged or stolen in one fell swoop and need to be replaced.
For what damage does the home contents insurance pay and what items does it cover?
With the basic package of household insurance, the costs for water damage, burglary and fire damage are often covered. Damage caused by storms and hail or IT data loss are covered by many insurers for a small surcharge. You will find a detailed overview of all the costs assumed in your policy, cheap insurers like HanseMerkur also offer a clear listing the benefits, whereby you can compare the insurance packages side by side.
Important to know: Household contents insurance is a so-called linked insurance. This means that you, as a customer, take out a total package of the things that are to be covered by the insurance. It is therefore not possible to take out insurance against a single source of danger, such as a break-in. However, it is possible to book additional insurance benefits. Many people, for example, who own an expensive bicycle and want to protect it additionally, make use of this.
In principle, everything in your household is covered. These include, for example:
- Household and electrical appliances
- Groceries and pet supplies
Does household insurance also make sense for tenants?
Although the name suggests it, home contents insurance not only insures the items in a house, but also those of a household, i.e. a single residential unit. It makes sense for owners In addition, homeowners insurance complete. However, household insurance is sufficient for tenants. And this is absolutely necessary in most cases. If you are a tenant yourself, think about how much the furnishing of your rental apartment is worth when you add it all up. If the purchase of all these things in one fell swoop poses a financial challenge for you, then you will also need household insurance.
Summarized: Household contents insurance is useful for tenants of a rented apartment, owners of a condominium, and homeowners.
What does a household insurance cost? What is the reasonable sum insured?
The amount of the insurance premium depends on the living space, the place of residence and any additional services. For example, the contribution of household insurance is usually higher in the city than in the country, as damage occurs more quickly here.
Cheap offers start at around 75 euros per year, with additional services they are usually around 150 euros per year for a single-family home. For a small rental apartment, the tariffs start at 50 euros per year.
The consumer advice center advises to do soto adjust the sum insured as closely as possible to the actual value of your household effects. On the one hand, this prevents you from paying too high premiums, on the other hand, it protects you against underinsurance, i.e. against an insurance framework that is set too low. Underinsurance occurs when you have agreed an insurance amount in the contract that is lower than the actual value of your property.
If damage now occurs, the insurance company will only cover the costs for this agreed framework and you will have to pay the rest out of your own pocket. To prevent this, you should follow the recommendations of the insurance industry as closely as possible, which suggests a certain sum insured per square meter of living space. The minimum sum insured is usually 650 euros per m².
IMPORTANT: Make sure to check the sum insured regularly and update your contract in the case of (expensive) new purchases so as not to be underinsured!
What should you consider when taking out household insurance? Which additional services are necessary?
Household contents insurance covers a large number of damage, but it does not cover grossly negligent behavior. Therefore, you shouldn’t rest easy knowing that you have taken out insurance, but still have to be careful to secure your possessions. This is especially true for apartment doors and unlocked bicycles. If a burglar enters your home without using force (for example through an open window) or if a bicycle thief does not first have to forcefully remove your bicycle lock, the contents insurance is not liable.
You also wanted to ask yourself whether it makes sense to take out additional services. If you keep a lot of cash or other valuables at home, it is necessary to take this into account when concluding the contract. Because with most household contents insurance, valuables are usually only reimbursed up to 20 percent (compensation limit). Even if you know that flooding occurs frequently in your area, or you want to insure an expensive bicycle or car, you should add extra protection to your basic contract.
A notice: If you move, the contract must be updated so that the insurance cover also applies to the new four walls. The furniture is not protected by the contents insurance during transport!
How do you find the right and affordable tariff?
Taking into account your living space and your individual needs for additional services, you can now look around for a suitable and sensible contract for your household insurance. You can find helpful information on this, for example, on the websites of all major insurance companies and the well-known comparison portals. At Stiftung Warentest you can find out about test winners or get experience reports in a forum or among friends.
Photo credits: © victor zastol’skiy – stock.adobe.com, © JenkoAtaman – stock.adobe.com (sorted chronologically or according to the order of the images used in the buying guide)