Property Insurance Explained Simply

Property insurance can provide financial protection for a home, apartment or other insured property against certain unexpected events.

The exact protection depends on the insurer and policy. Coverage can include the building itself, personal belongings, liability and additional risks such as flood or earthquake.

1. Building insurance

Building insurance generally relates to the physical structure of the insured property.

Depending on the policy, this can include walls, floors, ceilings, roofs and permanently installed fixtures.

2. Contents insurance

Contents insurance can cover certain belongings kept inside the insured property.

Examples can include furniture, appliances, clothing and other personal possessions, subject to policy limits and exclusions.

Expensive items may have separate individual limits.

3. Fire and smoke

Many property insurance policies provide protection against eligible damage caused by fire and smoke.

The amount payable depends on the insured limits, deductible and circumstances of the claim.

4. Water damage

Some policies provide protection for certain types of sudden water damage, such as water escaping from internal pipes.

Gradual deterioration, poor maintenance and certain other causes may be excluded.

5. Flood insurance

Flood coverage may be included in some property policies, offered as an optional benefit or excluded entirely.

Policies may have a separate flood limit and a different deductible from other types of claims.

6. Earthquake insurance

Earthquake protection can vary significantly between insurers and geographical locations.

Some policies include earthquake cover, while others require it to be added separately.

A specific deductible may apply to earthquake claims.

7. Theft and burglary

Property insurance may cover eligible loss or damage following theft or burglary.

Conditions can apply regarding locks, security systems, windows, occupancy and police reports.

8. Personal liability

Some property insurance policies include personal liability protection.

This may provide protection in certain circumstances where the insured person becomes legally liable for injury to another person or damage to another person's property.

9. Alternative accommodation

If an insured property becomes temporarily uninhabitable following a covered event, some policies may contribute toward alternative accommodation.

Maximum amounts and time periods normally apply.

10. Accidental damage

Accidental damage is not automatically included in every property insurance policy.

It may be available as an additional benefit depending on the insurer and policy.

What may not be covered?

Property insurance policies contain exclusions. Depending on the policy, examples may include:

• Normal wear and tear.
• Damage caused by poor maintenance.
• Gradual water leakage.
• Certain natural disasters unless specifically included.
• Intentional damage.
• Unoccupied properties beyond permitted periods.
• Commercial activities not declared to the insurer.
• Losses above the stated policy limits.

Understanding the deductible

The deductible is the amount the insured person may have to pay toward an eligible claim before the insurer pays the remaining covered amount.

Different risks can sometimes have different deductibles.

For example, a policy might have a €250 general deductible but a €1,000 earthquake deductible.

What information can affect property insurance?

Insurers may request information such as:

• Property type.
• Property use.
• Country and city.
• Year of construction.
• Property size.
• Construction materials.
• Estimated building value.
• Estimated contents value.
• Security systems.
• Previous claims.
• Requested coverage.

How to compare property insurance policies

Comparing only the annual premium does not show the complete difference between two property insurance policies.

Useful factual points to compare include:

Example of a factual comparison

Imagine that two property insurance options both have an annual premium of €220.

In this example the premium is identical, but the second policy has higher insured limits and includes additional protection.

This is a factual comparison of policy terms. It does not mean that one policy is automatically suitable for every customer.

Before submitting a property insurance request

Having the following information ready can make the process easier:

• Property address or location.
• Property type.
• Year of construction.
• Approximate property size.
• Estimated building value.
• Estimated contents value.
• Current insurer, if applicable.
• Current premium and deductible, if known.
• Existing property insurance policy, if available.