Tenants: make sure you’re fully covered

Whether you’re renting a new place or returning the keys, important questions about insurance get lost amid signing a lease or the stress of a move. We’ll tell you what kind of cover tenants should take out.

Red wine stains from your last party? Ceramic hob shattered? Sooner or later, you’ll need to work out who’s responsible for the damage. As a general rule, if you’re renting an apartment, you’re liable for damage to the building and the apartment itself. This arises from statutory liability for the damage inflicted by a person on a third party’s property. The apartment and everything that comes with it belong to the landlord. That’s why it’s truly in tenants’ interests to be well insured. Another key point: your insurance policies have to suit you and your specific needs.

Insurance: right for you

Someone moving into an apartment for the first time is in a very different place in life than a household with several adults and children. You might just want to insure your new bike and laptop. Others might want to consider all-risk cover. This covers the full contents of the household – and not just for fire, water and theft. All-risk insurance covers every potential risk – which means the insurance will pay out even if you’ve dropped an expensive device. However, if you opt for a basic insurance policy, ‘own damage’ (to your own furniture and belongings) is not insured.

Household contents and liability: what tenants need to know

Premiums remain within reasonable bounds – depending on the types of damage covered. First and foremost, tenants should look into the two types of insurance below:

  • Household contents: Damage caused by fire, water or theft; for example, if a house fire destroys your furniture. The insurance policy would also compensate for the theft of valuables during a break-in.
  • Private liability: Damage inflicted by a tenant on a third party’s property.

Of course, there’s a wide range of other risks that may also crop up, as well as supplementary insurance policies. If you have particularly expensive display cabinets, you should consider separate glass insurance. The same also applies for very expensive objects, as well as situations not commonly seen in the average household; household contents insurance usually covers jewellery and valuables worth up to about CHF 10,000 to CHF 15,000. If you keep valuable heirlooms or an entire art collection at home, you should discuss these with your insurance company. Additional cover for ‘petty theft’ is also worth a mention. This type of cover also applies when something is stolen outside the home, such as an expensive mountain bike.

Insurance policies for tenants: a lot to choose from

You will find countless insurance policies on the market. The way they are sold varies too: many people take out insurance in person with an agent from an insurance company or a local broker, while an increasing number are now purchasing theirs online. Premiums, policy conditions and contractual terms vary. Generally speaking, household contents and private liability insurance policies that provide sufficient cover usually cost no more than a few hundred francs. The best approach is to compare several quotes. Depending on the insurance company, a good package deal might even be available. An important note: a significant component of private liability insurance benefits cover tenant damage (which often comes to light when tenants leave a property). As a result, tenants usually pay higher premiums than home owners.

Premiums and benefits are not the same everywhere – on the contrary; for instance, private liability insurance, which is particularly advisable for tenants. ‘The legal liability may be the same in principle, but there are certain differences in the policies’ small print,’ says Stefan Thurnherr from VZ Vermögenszentrum.

Insurance: what’s in the small print?

Approaches to excess in private liability insurance (usually CHF 200 to CHF 300) are strikingly varied. The excess is sometimes deducted from payouts as a lump sum or several times; some insurance companies apply the excess to each individual room or for each individual claim. ‘Depending on the approach, the excess can really mount up,’ Thurnherr points out. Of course, it’s more consumer-friendly and accommodating if the insurance company only applies the excess once.

Tip: the best approach is to find out what’s in the small print before taking out an insurance policy. You can also find offers that expressly do not involve excess. Members of the Mieterverband tenants’ association can also offset the excess with a small supplementary insurance policy.

Keep checking the policy amount!

A key aspect of any policy is the amount covered. However, in the event of loss or damage, if the insurance company concludes that the value of the household contents should be estimated higher, it will reduce its benefits – even if the loss is only partial. If, in extreme cases, you’re under-insured by 50%, only half of the total damages will be paid out. The best way to safeguard against this is to check your household contents regularly and adapt your insurance cover to new purchases accordingly. Most insurance companies offer information sheets, tables and tools to help with this (insurance cover per number of people and rooms).

Technical terms: current or original value?

Unlike household contents insurance, private liability insurance for property always only compensates the current value at the time the loss or damage occurred. This means the value with amortisation taken into account (depreciation). Here’s a classic example in the rental context: let’s assume that a wall covering with dispersion needs to be replaced or repainted after eight years. According to the ‘service life table’ published by the tenants’ and home-owners’ association, paintwork and dispersion have a service life of eight or, in some cases, 10 years. Of course, for wallpaper, carpets and other floor coverings, we can similarly assume that the materials won’t last ‘forever’. The tenant is then no longer liable for replacement or redecorating. The replacement – and, in turn, the painting and decorating bill – is therefore considered ordinary wear and tear. Neither the tenant nor the insurance company are liable for this.

The situation is different for shorter tenancies – for instance, if parents paint over their children’s wallpaper in a bright colour. When they move out, the question of liability arises: if the wallpaper needs to be replaced after just five years, the tenant is liable for part of the costs (the current value). In that case, private liability insurance would step into the breach.

Moving out: what does insurance cover?

‘We should also note that liability insurance covers sudden, unexpected damage first and foremost,’ says Thurnherr from VZ. The spice that falls onto the glass ceramic hob, for instance, or the perfume bottle you dropped that damages the bathtub. It’s slightly different – from an insurance perspective, anyway – for damage that occurs only gradually. This includes damaged wall coverings in a home where someone smokes heavily. The limits would be exceeded in that case if the policyholder consciously accepted certain damage. That applies, for instance, to keen animal lovers who have numerous cats and dogs in their home.

In principle, tenants also have the option to take out legal expenses insurance. In practice, legal disputes regarding tenancy law are known to occur quite frequently. However, the same applies: you should carefully check and compare the amount of the premiums and benefits promised. For many standard cases, there are other alternatives open to you across the board, with a range of points of contact for tenant issues, legal advice and consumer protection.