Insuring a new-build flat and its contents after handover

After handover, it is advisable to have both property insurance and home contents insurance in place, and to check who is responsible for what: you as the owner, the owners' association, or the developer under the warranty. Insurance should start no later than the day you take over the flat. Specific terms differ between insurers, so compare them before signing and, if necessary, discuss them with an expert.

What is insured for the flat and what for the contents

Property insurance and home contents insurance are two different things and cover different assets. This is where buyers most often make a mistake, assuming that one policy will cover everything.

• Property insurance relates to the flat itself: structural parts, utility lines, floors, tiling, built-in elements and the like. In flats in an apartment building, the scope of what falls under your flat and what falls under the common parts of the building usually differs.
• Home contents insurance covers the furnishings: furniture, appliances, electronics, clothing and personal belongings. It often also includes items you had installed in the flat at your own expense, if the policy states so.
• Liability insurance is useful if, for example, you cause water damage to the neighbour below. It is often part of home contents insurance, but its scope and limits need to be checked.

Insurance of common parts and the role of the owners' association

In an apartment building, the building as a whole is usually insured at the level of the owners' association or the housing cooperative. Such insurance generally covers the common parts, for example the roof, façade, risers or lift. Before arranging your own policy, therefore, ask the property manager or the committee what is already insured and to what extent.

Do not assume that the building's insurance also covers the interior of your flat. Often it does not, or only partly. Request a copy of the building's insurance policy and compare it with what you will be insuring yourself, so that there is neither a gap nor unnecessary duplication.

How to set the sum insured and the scope of cover

The sum insured should correspond to what it would cost to restore the flat or replace its contents, not necessarily to the purchase price. A sum that is too low may lead to a reduced payout, while one that is too high needlessly increases the premium. For orientation on the value of a flat, you can look at the overview of new-build prices, but discuss the exact setting with an insurance adviser.

When choosing cover, pay attention to the following points:

• Natural perils: fire, explosion, flood, windstorm. Find out whether cover depends on the location; information about the area can be found in the overview of locations.
• Water damage: in apartment buildings it is among the most common. Check the limits and whether they also apply to leaks from neighbours.
• Theft and vandalism: insurers may require certain security measures, for example locking or a security door.
• Excess: determines what part of the damage you pay yourself. Consider how much you are willing to bear for smaller claims.
• Exclusions: situations to which the insurance does not apply. Read them carefully, not just the first page of the offer.

Insurance and your mortgage

If you are buying the flat with a mortgage, the bank usually requires property insurance and often also its assignment (vinkulace) in favour of the bank. This means that any insurance payout would go primarily towards repaying the loan. Conditions differ from bank to bank, so it is a good idea to discuss them with a mortgage specialist before the flat is handed over.

If you are only planning your financing, try the calculator and include the annual insurance costs in your budget. They are often left out of the monthly budget, even though they are a regular expense.

Developer warranty and insurance: two different things

Defects in a new flat, for example poorly executed plaster or leaking windows, are dealt with through the warranty and a claim against the developer, not through insurance. Insurance, by contrast, covers random events such as fire or flooding. The line between the two is not always obvious. If, for example, water is leaking because of a faulty joint from construction, it will more likely be a warranty claim.

Practical steps after handover:

1. Obtain a detailed handover record and photographs of the condition of the flat.
2. Keep the contract for work or the purchase contract, the handover protocol and the documents for the built-in elements.
3. Submit warranty claims to the developer in writing. Information about specific developers can be found in the developer catalogue.
4. In the event of an insured loss, report it to the insurer without undue delay and document the damage.

Your legal position in a dispute between a warranty claim and an insured event is best discussed with a lawyer. General information on the whole purchase process is summarised in the buyer's guide.

What to watch for when arranging a policy

• Arrange the insurance so that it begins on the day you take over the flat, not at a later date.
• Fill in all details about the flat, its furnishings and its security truthfully. Untrue information may jeopardise the payout.
• Compare several offers by scope of cover, not just by price.
• After furnishing the flat with furniture or expensive electronics, check that the sum insured is still appropriate.
• If you let the flat, inform the insurer; standard home contents insurance may not cover letting.

If you are still choosing a flat and want to compare what is on offer, you can use the project catalogue or send a housing inquiry form.

Frequently asked questions

Do I have to have insurance for the flat immediately after handover?

It may not be a legal obligation, but from the moment of takeover you bear the risk of damage yourself. If you have a mortgage, the bank typically requires property insurance. Check the conditions in the loan agreement.

Does the owners' association's building insurance also cover the inside of my flat?

Not always. Building insurance usually deals with the common parts, while the interior of the flat and its contents are often not covered, or only in part. Request the building's insurance policy and compare it with your own insurance.

What if a defect in the flat appears after handover?

A construction defect is dealt with through a warranty claim against the developer during the warranty period, not as an insured event. Submit the claim in writing and with photographs. In the event of a dispute, turn to a lawyer.