From renting to owning a property: What insurance do I need?

What changes with regard to insurance when I move from a rental apartment to a home I own?

Damage to the building

The biggest difference is the building insurance, which is now required. As the owner of a home, you are also responsible for damage to the building. Here you can find out what you need to consider when taking out building insurance.

Damage to third parties

As a homeowner, you are also liable for damage to third parties that can be attributed to your house or condominium (so-called “operational risk of a building”). Typical examples include a tile falling from your roof onto someone else’s car, or someone falling down the stairs in your condominium and breaking a leg because the railing was loose.

If you do not adjust your personal liability insurance to your new living situation, you could, in the worst-case scenario, be left with costs that threaten your livelihood. This is because property owner risks are not covered under a tenant’s personal liability insurance.

Damage to your personal property

When you move into a home you own, the risk factors your insurance company uses to calculate your premium and coverage usually change: For example, a home you own typically has more rooms and more living space overall. Perhaps you now also have a garden with a patio featuring expensive lounge furniture or a high-end grill.

Regardless of whether the value of your belongings changes, you should therefore adjust your home contents insurance to your new living situation. If you do not adjust your home contents insurance to your new living situation, you risk a reduction in the payout in the event of a claim due to underinsurance.

Okay, home contents and personal liability insurance should be adjusted when moving into your own home. But what about household insurance? There is a common misunderstanding here: the term “household insurance” refers to the combination of home contents and personal liability insurance. 

What types of insurance make sense for a home I own?

For insuring your home, you should at least have building insurance, personal liability insurance, and home contents insurance. If you’re moving from a rental apartment to a home you own, you should definitely have your contents and personal liability insurance adjusted to your new living situation.

In the following sections, you’ll learn what to look out for with each type of insurance. For additional guidance, we recommend getting a free consultation from our partner, Mobiliar.

What should you keep in mind regarding building insurance?

The most important thing when insuring a building is that the sum insured corresponds to the actual replacement value. For older buildings, there is a high risk of underinsurance due to rising construction costs. If your building is underinsured in the event of a claim, the insurance company will not cover part of the costs, even for minor damage.

Glass breakage and burglary damage to the building can usually be insured more affordably through add-ons to your home contents insurance than through building insurance. In the following guide, you’ll learn how building insurance is regulated in Switzerland and what you should look out for when comparing supplementary insurance policies. Try to avoid double coverage between building and contents insurance. Seek advice on this.

What do homeowners need to consider regarding home contents insurance?

Adjust your home contents insurance to your new living situation and check whether the sum insured is still up to date. This way, you won’t face any unpleasant surprises due to underinsurance in the event of a claim. Note that home contents insurance only covers damage to movable items. For damage to permanently installed building components, such as hardwood floors or a built-in kitchen, building insurance is generally responsible.

For burglary damage to the building, on the other hand, home contents insurance usually covers the costs. Make sure you have coverage of at least 20,000 Swiss francs for burglary damage to the building. Also check whether you want to include the glass breakage rider for the building in your home contents insurance. This is usually cheaper than through building insurance. Since the rider also covers damage to sinks, toilet bowls, or the cooktop, it can be worthwhile even for buildings without large windows.

Make sure you do not double-insure burglary damage, glass breakage, structural alterations made by the owner, and damage to items in the vicinity of the house under both your home contents and building insurance policies.

What do homeowners need to consider regarding liability insurance?

Have your personal liability insurance adjusted to your home ownership. If you previously lived in a rental apartment, you must now additionally insure against damage that your building may cause to third parties (so-called “operational risk of a building”). If you live in the property yourself, you can cover this risk through your personal liability insurance. Make sure that damage caused by gross negligence is also covered.

If you rent out your home, additional building liability insurance is usually required to cover the owner’s liability risk, unless it is only a granny flat. In this case as well, you should ensure that damage caused by gross negligence is covered. For condominiums, building liability insurance is typically taken out through the condominium association.

Unlike for tenants, accidental damage to permanently installed building components such as hardwood floors or built-in kitchens is not covered by personal liability insurance for homeowners. This is because such insurance only covers damage you cause to third parties. Since the building belongs to you, such damage is not covered.

If you want to insure accidental damage to permanently installed building components, you need the “building comprehensive insurance” rider in your building insurance (also called “all-risk coverage”). Since this rider is expensive, fewer than ten percent of all homeowners in Switzerland purchase it.

Summary: What do homeowners need to consider when insuring their home?

Have both your home contents and personal liability insurance adjusted to your new living situation. Check with your building insurer to see which additional coverages make sense in addition to fire and natural disaster insurance, and seek advice on this. The add-ons “building water damage insurance” and “gross negligence coverage” are advisable for most residential buildings.

It’s best to insure glass breakage on the building through your home contents insurance, as this is generally cheaper than building insurance. This add-on is advisable in most cases, as it also covers damage to toilet bowls, sinks, and cooktops. Make sure your home contents insurance covers at least 20,000 Swiss francs for burglary damage to the building. Try to avoid double coverage between home contents and building insurance.

If you live in your own home, you must also insure against damage to third parties caused by your building under your personal liability insurance (so-called “operational risk of a building”). If you rent out your home or parts of it, you usually need additional building liability insurance for this (exception: granny flats). In both cases, you should ensure that the insurance also covers damage caused by gross negligence.