Property Insurance In Switzerland Explained

Most buildings in Switzerland are insured against fire and natural hazards like hail and windstorms.

Property insurance is taken out by property owners. As a renter, you do not have to insure your rented property or pay the premiums for building insurance. These are covered by your landlord. Apartment owners usually pay building insurance premiums jointly.

19 of the 26 Swiss cantons have cantonal building insurance schemes which all buildings must be insured with by law. The seven so-called “GUSTAVO” cantons are exceptions to this rule.

Building insurance in GUSTAVO cantons

The abbreviation GUSTAVO is sometimes used to jointly denote the cantons of Geneva, Uri, Schwyz, Ticino, Appenzell Innerrhoden, Valais and Obwalden. These cantons do not have a monopolized building insurance system.

The GUSTAVO cantons, for their part, can be divided into two groups: In the cantons of Uri, Schwyz and Obwalden, homeowners are required to take out a building insurance policy covering fire and natural hazards.

In the cantons of Geneva, Ticino, Valais and Appenzell Innerrhoden, homeowners can decide whether or not they want to take out building insurance. Exception: Buildings in the Appenzell Innerrhoden district of Oberegg must be insured against fire and natural hazards by the district buildings insurer.

What is covered?

Basic, obligatory building insurance covers a building against natural hazards like windstorms, hail, floods, water damage, snow or rock avalanches, land slides and damages caused by the weight of snow. But take note: The actual definitions used in your policy are often much more closely defined.

For example, the building insurance policy of Bern defines a windstorm as a wind with a speed of at least 63 kilometers per hour (10-minute average) which also damages other buildings in the vicinity. So if, for example, a windy spell damages your expensive venetian blinds, you won’t necessarily be compensated by your home insurer.

Damages which are not caused by hazards of extraordinary intensity are not covered by the basic cantonal building insurance. Foreseeable damages which could have been prevented also will not be eligible for cantonal building insurance coverage. Building insurance does not release you from your due diligence obligations as a landlord.

Water damage is not always covered

Cantonal building insurance only covers water damages caused by rain-induced flooding.

Damages caused by leaking pipes or water damage incurred due to unsound roofs or walls are not covered by the obligatory building insurance. Even water damages caused by ground water are, as a rule, not covered.

Many cantons do offer supplementary insurance coverage for water damage. The canton of Basel Landschaft, for example, offers a number of optional coverages against water damages, including coverage for damage caused by leaking pipes or roofs. You can also obtain supplementary building insurance coverage from private insurers.

Not all structures are covered

Even when the incident that damages your buildings is covered by your insurance policy, there is still a chance that the insurer will not compensate you for the damages. This can happen when the damaged or destroyed structure does not qualify as a part of the covered building.

Flagpoles, pathways, retaining walls, swimming pools and garden fences are, as a rule, not covered by basic cantonal building insurance. They will only be covered if you specify that you want these to be included in the insurance valuation of your property, or if you take out additional garden and contents insurance.

Understanding exactly which structures are defined as part of the actual building can be difficult. This is true even for portions of the house itself. While lightning protection and lighting systems are covered, not all cantonal building insurance providers cover damages to alarm systems, for example.

In any case, you always have the option of getting additional insurance from a private insurance company. Make sure to carefully check exactly what your obligatory insurance policy covers before getting additional insurance. This will help you avoid wasting money on overlapping coverage.

Household insurance is not included

Make sure you understand that building insurance does not replace household insurance. Household insurance covers movable items inside your home, such as furniture. However, it may be worth it to look through the exact terms and conditions of your household insurance policy and see what coverage it gives you. Example: Laundry room installations are covered by compulsory buildings insurance in the canton of Zurich but not in the canton of Fribourg, where you have to get voluntary household insurance to cover them.

Major differences between cantons

In the 19 cantons that enforce their own cantonal building insurance, coverage against fire and natural hazards is defined by cantonal building insurance law.

The exact terms and conditions attached to building insurance vary between cantons. As well as differences in premiums, cantonal insurance policies differ in many more aspects.

One example of this is the maximum value a building can have before obligatory building insurance applies. If a building’s value is lower than a certain minimum amount, the owner is not obligated to insure it. In the canton of Zurich, this value is 5000 francs, in canton Thurgau it’s 10,000 francs and in canton Appenzell Ausserrhoden, buildings valued below 15,000 francs do not require obligatory insurance.

The details surrounding what structures are covered by obligatory buildings insurance also vary. In some cantons mailboxes are covered, while other cantons differentiate between mailboxes that are attached to the building and detached mailboxes (which aren’t always covered).

Differing deductibles

Cantonal differences also affect the deductible you pay for each claim. The deductible on policies from the cantonal buildings insurance of the canton of Zurich is 500 francs per claim for damages caused by natural hazards. In the canton of Aargau, the deductible is between zero and 300 francs, depending on the hazard. In Bern the deductible for natural hazards is equal to 10 percent of total damages or 100 francs minimum, but never more than 1000 francs per incident and building. No deductible is charged for fire damage. In the canton of Basel Landschaft there is no deductible.

Swiss buildings insurance premiums compared

The size of the insurance premiums you pay depends on several factors. Your premiums are set in relation to the maximum benefit of your policy, which generally matches your building’s value as determined by the insurer. The higher the value of the building, the higher the resulting premiums will be.

Other criteria which affect premiums are the location and structure of the building. Insurance premiums can be substantially higher if a structure is built of flammable materials or located in an area with a high risk of natural hazards. Example: If you own a highly exposed building on an avalanche-prone mountainside, you can expect to pay higher premiums.

The way a building is used will also affect premiums. A home used as a private residence will not command the same premiums as a building used in the hazardous chemical industry.

If you live in a GUSTAVO canton, you can get both obligatory buildings insurance and supplementary insurance from a private insurance company. The differences in prices charged by cantonal and private insurers can be notable. On average, private insurers charge higher premiums than cantonal insurers.

The differences in premiums charged by various private insurers are large. Make sure to get quotes from many different insurers. The differences in costs and benefits among private insurers are bigger than the differences between cantonal insurance providers.

More information:
Earthquake Insurance in Switzerland: Necessary or Not?
Swiss Household Insurance Comparison
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