Apartment insurance against fire and other random events
An apartment fire and other random events insurance is a basic real estate insurance. It can be “encapsulated” with additional options, e.g. third party liability in private life, insurance of home movables (e.g. electronic equipment). What do you need to know about it? We have checked.
Property insurance against fire and other random events is not a mandatory insurance. It is only required when the purchase of an apartment is financed with a mortgage loan. Banks then give the customer a choice – he may use the insurance offered by one of the insurance companies operating on the market or use a policy offered by the bank granting the loan.
How much does a fire and other random events insurance cost?
The cost of insuring an apartment against fire and other random events depends, among other things, on the value of the real property and its location. How much does it cost to insure an apartment? We will show it using the example of an apartment located in Jelonki in Warsaw, worth between 300 and 400 thousand PLN. We will compare two insurance options:
with basic protection – mortgage insurance with assignment to the bank
with optimal protection – insurance against random events.
We will take into account insurance offers that can be found in the home insurance comparison engine Punkta, formerly mfind.pl.
As the examples above show, the cheapest home insurance can be had for as little as 44 PLN per year (in the case of basic protection) and from 83 PLN (for optimal protection). Is it much? Let’s assume that the apartment you want to insure is worth 350 000 PLN. In such a case its insurance will cost you:
in the basic variant – from 0.01257 of its value up to 0.04657 of its value
in the optimal variant – from 0.02371 percent of its value to 0.07029 percent of its value.
These are probably not large costs, especially considering that in the optimal variant you are covered by Third Party Liability in private life (and this insurance – as we wrote – can be useful).
What to look for in an apartment insurance?
You can buy an apartment or a house from fire and other random events insurance practically in every insurance company. As we have shown in the tables above, these insurances differ in price (despite similar coverage). Different insurance companies define “other random events” differently. In some cases, the term includes flood, surge, or falling tree. In others, it does not, and if you want to insure your home against such an eventuality, you must purchase such insurance.
Another issue is the definition of high wind/hurricane. This issue is worth paying attention to, especially in the context of storms observed in Poland in recent years, which are often accompanied by strong hurricane wind. Strong or what kind of wind? According to the definition of a hurricane it is a strong wind whose average speed exceeds 33 m/s, i.e. not less than 12º on the Beaufort scale. However, insurance companies use both terms interchangeably. For example, in the General Insurance Conditions (GIC):
Strong wind is defined as the wind with speed not less than 16.0 m/s (57.6 km/h), determined by the Institute of Meteorology and Water Management.
UNIQA hurricane is defined as the wind speed not less than 17.5 m/s.
Generali, in turn, in the GTC for houses, apartments and personal liability does not specify the speed at which the wind has to blow in order to be considered strong, and defines it as follows strong wind – wind which causes damage in the place of insurance. The same applies to Allianz, which defines strong wind as the action of the wind that causes destruction or damage to the object of insurance; Allianz is liable if strong wind causes damage in the nearest vicinity of the place of insurance; the insurance also covers the consequences of damage caused by the impact of parts of buildings, trees and their parts or other objects knocked down or carried away by strong wind.
One should also remember that in some insurance companies (e.g. Generali) insurance against damages caused by strong wind/hurricane requires payment of additional premium.
Before signing a property insurance contract, you should also check if the insurance company will pay you compensation not only for the damages caused by fire, but also for what might have happened in your apartment during the rescue operation. Damage to your apartment may also be caused by smoke or soot – insurance against these risks may also require you to pay an additional premium.
It’s also worth noting how a particular insurer defines flooding and what options are included in the coverage, and whether – like wind for example – the coverage requires an additional premium.