Sedan Home is valuable and an important refuge. After disasters like floods, insurance can help rebuild it and bring it back to life. Experts give advice.
There are events that cannot be prevented. Heavy rains and floods often come unexpectedly. Those who take precautions are better off in an emergency. The right insurance helps rebuild the home you love.
An overview with all important tips, also for people without insurance
1. What insurance companies pay for flood damage?
Buildings or contents insurance will cover damage caused by flooding, as long as the policy elemental damage it covers
Many insurers already offer this module as part of their new contracts. However, it may also need to be booked separately. In the case of newer contracts without elementary damage insurance, the addition is usually easy, according to the General Association of the German Insurance Industry (GDV). Older contracts may need to be replaced.
“The insurance premium amount it depends on several factors, such as the value of the house, the type of construction or the location”, says Claudia Frenz of the Association of Insured Persons (BdV).
Of course, insurance is always expensive when the risk of flooding is particularly high. “But particularly here, natural hazard insurance is strongly recommended,” says Frenz.
Then you may have to pay an expensive premium. Therefore, often a high excess they agreed to achieve affordable regular charging.
There is one for storm damage to a car, mobile home, or caravan. All-risk or partially all-risk insurance in. The replacement cost of the vehicle is fully insured. Depending on the rate, different deductibles may apply.
2. Exactly what is insured
- The building itself: The elemental damage module in residential buildings insurance covers damage in and on the building. It also covers the costs of pumping water, drainage and repairs, and in the worst case, the demolition and new construction of the house. The insurance also covers temporary accommodation costs and possible loss of rent.
- Inside the building: The so-called household effects include everything that is in it but is not permanently attached to the building or part of the house. According to the GDV, it is, for example, furniture, carpets, lights, electrical appliances, household items, books and clothing destroyed. It even includes pet food.
But cash, certificates, savings books, securities, jewelry and collectibles are also part of the policy, although cash and other valuables are covered. compensation limits are.
Elemental damage insurance for household goods covers the cost of repairing the inventory and reimburses the replacement price if the goods have been completely destroyed.
Good to know: There is usually a maximum limit of around 20 per cent of the total sum insured for valuables. Depending on the valuables involved, the compensation limit may vary.
The maximum cash limit is usually between 1,000 and 2,000 euros. Another possibility: the insurance contract specifies a percentage of the sum insured, for example, one percent. Therefore, you are only reimbursed the maximum amount established by the maximum compensation limit.
If the money is kept in a safe structurally connected to the house, the limits are usually higher.
- In the garage: Insurance for household goods and residential buildings also applies to outbuildings, that is, for damage to the garage and the things that are stored in it. Here, for example, lawnmowers, tools or bicycles are insured.
- On the property: “The garden is part of the property and all things that are firmly attached to the ground are protected accordingly,” explains Oliver Hauner, head of property insurance at GDV. These include decks, anchored swings, and permanently installed lights. “The cleaning costs that arise because, for example, trees have to be felled are also insured here.”
If it is necessary to renew the plants, it depends on the contract if the costs are covered and to what extent. “A garden shed, carport, garden and greenhouse, etc. may also be protected by home builder insurance with elementary coverage,” says Hauner. Pools are covered by both policies. Mobile pools are considered household effects, while permanently installed pools are part of residential buildings insurance.
3. What you should pay attention to when entering into a contract
● Additional building block: The policy must include natural hazard insurance. This is the only way to cover flood damage.
● Tenant: You must make sure. According to the GDV, this also applies to your own children if they live in a closed apartment within the parents’ house.
● own debt: It is important that the “gross negligence” objection on the insurance rate be waived. Frenz, a BdV expert, advises him. Because the insurance does not always cover all damage, for example, if elementary precautionary measures have not been taken into account in an emergency. For example, if you forgot to close the windows when it rains heavily.
● Own measurements: Sometimes insurance companies may require you and your home to be protected from damage and weatherproofed to a certain extent. If water enters, the elemental damage insurance will take effect.
An example of this is that backflow valves in pipelines are regularly maintained and this can also be documented. According to the GDV, there may also be specifications in high-risk regions, such as tiles for ground-floor rooms, specially secured basement windows, or that electrical devices can only be stored on upper floors.
● Waiting period: Keep in mind that an insurance contract does not take effect immediately. There is often a waiting or grace period. Depending on the provider, it can be several weeks. Information about this can be found in the policy.
Background to the regulation: Insurers want to prevent abuse and rule out an insurance policy that is only taken out shortly before an expected storm or flood and then canceled again after the damage.
● Property properties: “If the house is in a particularly vulnerable location, a detailed risk assessment may be necessary,” explains GDV expert Hauner. “In areas with a high risk of flooding, the insurer can ask the client, for example, about the existence of individual protection measures in the home.”
Anyone interested in insurance is legally required to provide this information. “However, in general, the policyholder only has to respond to what the insurer specifically asks for in the application or during the underwriting,” explains Hauner. “However, under no circumstances should you overlook or hide anything, as this may cause problems in the event of a claim or jeopardize the insurance contract.”
● Work space: Office space in residential buildings is not always secured. According to the GDV, many offices are part of household insurance. However, if you have a studio in your apartment that is used exclusively for professional or commercial purposes, you may need an additional module from the insurer.
“However, in practice, the problem should affect only a few customers,” says Hauner. “For most insured people, such a room is used, at least in part, privately, for example as a home office during lockdown or if employers have applicable labor regulations.”
4. So you can get insurance payment faster
Basically, it makes sense to have a list of your belongings. This makes it easier to report the damage to the insurance company.
Photos of the condition of the building and furnishings and, if still available, scans of purchase receipts are also helpful. The files can be in a cloud service, for example.
Why digital provision?
In the case of floods, but also fires, not only the objects are completely destroyed, but also the evidence. And when you feel overwhelmed by such a catastrophe, you may not remember all your belongings anymore.
If you prefer to keep the actual receipts, you should store them in the form of photos and paper lists with relatives or acquaintances in other places.
5. No insurance coverage: now what?
There may also be help if you don’t have insurance after a flood, even if that’s just a drop in the bucket.
However, as a general rule, government payments are only made for major events of the century. As in July 2021, when parts of Rhineland-Palatinate, NRW, Bavaria and Saxony suffered massive damage from heavy rain and flooding. For this purpose, the 2021 National Development Assistance Fund was created.
According to the Federal Office for Civil Protection and Disaster Assistance, it can be assumed that there will be no state aid in case of minor extreme weather events. “Whether it is granted is at the discretion of the federal states,” he says.
If no support is offered, the costs may be tax deductible. The conditions:
- Owners and Renters: Damage costs can be reported on the tax return as an extraordinary burden, but only with one important restriction: Those affected must have exhausted all insurance options before the state, so to speak, steps in with a tax break.
“The Federal Tax Court only allows damage repair and replacement costs to be deducted if generally affordable and customary insurance is not available,” explains Christina Georgiadis of the United Income Tax Aid Association (VLH).
This includes, for example, building insurance or household goods insurance, but not so-called elementary insurance. Whether an insurer will accept the application for natural hazard insurance as additional insurance coverage is decided based on claims experience over the past years and decades.
- Owner: Rental and lease income is reported on the tax return, and in return, expenses needed to repair storm damage can typically be claimed as income-related expenses, as Georgiadis explains.