Household Insurance Explained

Get helpful tips about Swiss household insurance here.

Household insurance protects you from financial losses caused by the destruction or loss of your property due to theft and fire or water damage. As a renter the premiums you pay for this insurance coverage can offer relatively good value.

A household insurance policy is almost certainly worth getting if you own more than a table, chairs and bed, figuratively speaking.

Household insurance policies are a form of casualty insurance. After a covered incident, the insurance company analyses damages and, in the best case, reimburses you for your loss up to the insured value of damaged or stolen items.

Typically, the insurance company estimates the cost of damages based on the replacement cost of damaged property. Example: If your 10-year-old bed is destroyed in a fire, the insurance company will pay out a benefit equal to the cost of purchasing a new bed of similar value.

Depending on your policy, specific property such as bicycles or skis may only be covered up to their actual cash value. In this case, the benefit paid out will be based on the going price for similar items of a similar age and with the same amount of wear, rather than the actual price you paid when you bought those items new.

Pointers for choosing the right household insurance:

Avoid being underinsured by your household insurance. Underinsurance results when the value of your household property becomes higher than the coverage provided by your insurance policy. In the unfortunate event of a major disaster or a write-off, inadequate insurance coverage will only be enough to cover part of your loss, rather than all damages. Without adequate insurance, a major disaster, such as flooding, can hit your finances hard.
Some insurance companies are more accommodating with regards to underinsurance, and when in doubt, allow for underinsurance equal to as much as 10 percent of the sum insured.
Also take care to avoid over insuring your property, which results in your paying higher premiums than necessary. Take time to consider which benefits you really need, and which benefits do not bring added value.
When estimating the value of your property, it helps to make a list of the most important (meaning the most valuable) items you own. Insurance companies provide suggested coverage limits based on the value of average households. For example, an upmarket 4 room apartment might have a suggested sum insured of 150,000 francs.
Reviewing your possessions from time to time – especially after a major change in your overall circumstances – can help you avoid being either over insured or underinsured.
The optional “simple theft away from home” rider can be worth it if you want to insure items that you regularly take with you when you leave your home, such as phones, laptops or bicycles. Cash losses resulting from simple theft without the threat of violence are not covered.
Luggage which you take with you when you travel can also be covered by household insurance. This can be worth it because many travel insurance policies do not include baggage insurance coverage.
Valuables like jewelry and watches are not insured by a basic household insurance policy, but can be added to your policy in the form of an optional rider.
Premiums and benefits vary in a big way between household insurance policies. A household insurance comparison can save you a lot of money.
Read the fine print on a policy carefully before you sign on the dotted line. This is especially important with regards to the insurance term. Insurance companies generally want to tie you into the longest possible contract, and often try to slip a long insurance term into the contract.
As much as possible, only sign up to contracts that you can terminate on an annual basis.

The moneyland.ch team

More on this topic:
Hazards covered by Swiss household insurance
Simple theft away from home
Household insurance comparison
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Editor Daniel Dreier

Daniel Dreier is editor and personal finance expert at moneyland.ch.

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