Building and buying

Building insurance: how to protect your home

Arne Schätzle

Fire, water, storm and hail: anyone who loves their home will want to protect it from danger – or at least protect themselves from the financial consequences. Thanks to building insurance, you can protect your property in the event of damage. We explain what you should pay attention to when taking out a policy.

Houses located directly on the water in Stein am Rhein.
© Getty Images

In this article

In most cantons, building insurance is compulsory

Building insurance is important for all homeowners and landlords. In most cantons, it is even required by law for all buildings whose value exceeds around 5,000 francs.
But even if this legal requirement does not apply, it is still advisable to financially protect your property. It is not simply a matter of covering your own losses in the event of damage. You may also have to bear the damage caused to tenants or neighbors.

Regulations broken down by canton

In 19 out of 26 cantons, there is a state monopoly on building insurance; in this case, it is mandatory to take out a policy. The cantons of Uri, Schwyz and Obwalden are exceptions. Although building insurance is mandatory here too, there is no state monopoly. Instead, real estate owners are free to choose between several private providers.
In the cantons of Geneva, Valais, Ticino and Appenzell Innerrhoden, on the other hand, there is no compulsory insurance for buildings at all. Insuring your property with a private provider is voluntary here.

View of a row of apartments by a lake.

Water on one side, rock on the other: besides flooding, rockfall is also a possible natural hazard.

What type of damages does building insurance protect against?

Building insurance protects your property against fire and natural hazards. Each building insurance company determines its own specific coverage. Private insurers usually offer a basic tariff. This generally provides damage coverage equivalent to that offered by the cantonal monopoly insurance.

The building insurance will pay for damage to the house or any construction on the plot of land. This means it will also cover the garden shed, tool shed, garage or carport.

However, damage to the inventory of the building is not covered by this type of insurance. You need to take out household or building liability insurance for this. Integral fixtures are an exception. These include ovens, heaters and solar power systems, for instance – and even the fitted kitchen, unless it is custom-made.

What about damages caused by natural disasters?

The damages referred to in this case are those caused by natural hazards, including lightning, hail, floods, deluges or, in relevant areas, by snow pressure, landslides or avalanches, as well as by rockfall and mudslides. If your property is affected by a natural hazard, the building insurance will cover the pending repairs and – if necessary – complete reconstruction.

What fire damage is covered by building insurance?

The fire damage category includes damage caused by fire, smoke, heat or lightning. Insurance policies even cover the risk of explosions.
Fires can have different causes: a force of nature, a technical defect or inattention. In fact, most fires in houses and apartments are due to human error, and often start at the kitchen stove.

Dangers lurk not only in the kitchen, but also in other living areas, where objects such as irons, cigarettes or candles can cause a fire. In the event of a fire, insurance companies usually take a close look at the damage. Intent and gross negligence are usually not covered if they are the cause of the fire.

What will the insurance company actually pay out in the event of a claim?

Building insurance companies usually insure at replacement value. This is the cost that would be necessary to restore the building to its original state. Cantonal or private insurance companies obtain this value by means of an estimate of the building, carried out every 12 to 15 months.

Some properties are also insured at fair value. This includes buildings that don’t comply with building or fire safety regulations, or in cases where the value of the building falls below 50 percent of its new value. Even buildings that are classified in a high-risk class due to their construction or location are often only insured at fair value.

In contrast to the modern white apartment building next to it, the older building already has loose roof tiles. Several windows on the upper floors are nailed shut with boards.

Old alongside new: older buildings like the one on the right in the picture can often only be insured at fair value or even at demolition value.

Buildings that are intended for demolition or are no longer usable due to their condition are insured at demolition value, i.e. the amount required to demolish and dispose of the building.

What damages are not covered by building insurance?

Not all damages are covered by cantonal building insurance. Certain aspects are not part of the standard protection offered by private providers. You should therefore always check the quote carefully.

In principle, further coverage is possible as a supplement to the basic coverage – even for owners in cantons with state monopoly insurance. Cantonal fire and natural hazard insurance does not cover water damage caused by leaking tap water, for instance.

Water damage caused by leaking water pipes may require supplementary coverage. In the worst-case scenario, this could cause water to penetrate the masonry. You can protect yourself with extra building water insurance. This option is often included in the basic package available from private providers, while many cantonal insurance companies offer additional building water insurance.

A man in his living room uses a pot to catch water dripping from the ceiling.

Damage caused by leaking water pipes can be covered by supplementary building insurance.

Earthquakes are also not generally included in cantonal building insurance, even if they are natural hazards. One exception is the canton of Zurich.

Damage caused by vandalism is not usually part of the building insurance package. Be it graffiti on the house wall or broken windowpanes, both should be protected separately.

Addresses of cantonal building insurance companies

We have listed the links to the 19 cantonal insurers below:

Conclusion: protect yourself with building insurance

There are several points to bear in mind when it comes to building insurance. But thanks to our tips, rest assured that you will at least be well protected against the financial consequences of fire, water, storm and hail.

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