Do you need property insurance?

Real estate insurance in Russia: main types, conditions and features. Why have home insurance at all?

Reading time: 7 minutes

Apartment insurance - an unnecessary waste of money or a necessity?

Someone thinks that real estate insurance is a mandatory procedure, which, in case of emergency, will cover losses caused by fire, flood or any other natural disasters. Someone, on the contrary, is firmly convinced that nothing bad can happen to him and his real estate.

With the current level of high-tech devices for or an apartment, various accidents are completely excluded, and insurance is just an unnecessary waste of money. Who is right? Do I need to insure my home against any risks?

What is the situation with real estate insurance in other countries?

If we talk about Europe or the United States, we can state that there are many quite voluntarily laying out money for real estate insurance policies. The latest statistics show that 95 percent of citizens do this, despite the growth of technologies aimed at ensuring home security.

In Russia, things are much worse with policies. After the abolition of compulsory insurance of buildings (this was the name of this Gosstrakh service at that time), fewer people turn to specialized companies. However, after any incident, many catch on. This is quite logical, since insurers can compensate for a very significant part of the losses caused by the elements, save you from unnecessary repair costs. This is exactly the case when saving on the purchase of a policy can lead to more serious expenses.

Who needs compulsory property insurance?

Answering the question - is it necessary to insure real estate, let's start with those owners who are somehow forced to purchase a policy. These are buyers who purchase an apartment or a private house on a mortgage. In this case, the bank that provides the loan is interested in insurance - it is vital for it that nothing happens to housing until the buyer repays the debt.

If you buy housing at your own expense and in the secondary real estate market, the decision on insurance depends solely on you. But at the same time, it is important to remember that having a policy is a guarantee of receiving monetary compensation for losses.

What amount of payments should be expected? It depends on which type of insurance you choose specifically.

The main types of real estate insurance offered by domestic companies

Flooded the neighbors below? Liability insurance will come in handy.

One of the arguments against insurance is the high cost of policies. Many companies do offer too high prices, but even they provide you with the opportunity to insure only against some risks, so you can protect yourself from certain unpleasant surprises at a very low cost. To do this, you just need to choose one of the following types of insurance:

• insurance against flooding of the apartment by neighbors from above. In the vast majority of cases, payments under the policy allow you to fully compensate for the cost of damaged furniture, save you from having to buy materials for repairs with your own money;
• liability insurance, which will come in handy if you flood the neighbors below or cause any damage. You do not have to cover it, as the insurance company will pay for everything;
• insurance against theft or burglary. As practice shows, the policy is much cheaper than installing video cameras, alarms, and other electronic security equipment. At the same time, you will be sure that insurers will cover most of the losses. If your security system is compromised, which happens quite often, you will have to bear the costs yourself;
• repair insurance in an apartment or in a private house. This type is resorted to by those property owners who use expensive building and finishing materials, buy exclusive furniture.

Today, a fairly common type of insurance is to ensure the security of a transaction for the purchase and sale of real estate. Its popularity is associated with fraudulent activities and allows you to protect you if, after acquiring a new home, there are suddenly its true owners who have all the documents confirming ownership rights.

Conditions and features of real estate insurance

If we talk about city apartments, then it should be remembered that the cost of the policy will be much higher than usual, if during the repair process you did redevelopment, changed the scheme of the power supply system. In the secondary market, it is almost impossible to insure old housing with an unsatisfactory state of communications - water supply, gas supply, sewerage.

Insurance of private houses, which are separate construction projects, is somewhat more expensive, since they have their own engineering systems. The risks associated with their operation must be included in the contract.

If you want to insure an unfinished object, you will have to agree to the following conditions put forward by specialized companies:

• mandatory ownership of the building;
• insurance is carried out exclusively against fire, and the cost of policies will be quite high.

In addition, many insurance companies independently determine the stage of construction at which a building must be in order to purchase a policy.

How much does property insurance cost?

What determines the cost of an insurance policy?

We have already mentioned above that the unsatisfactory state of engineering communications greatly affects the cost of the policy. In addition, the price depends on the following factors:

• the chosen type of insurance, as well as the risks that the company will cover. For example, you can insure only property and finishing materials, without including the roof and foundation in the contract. Or purchase a flood policy if the risk of fire or theft is completely excluded;
• materials from which a private house is built. For example, wooden buildings are insured at a higher price than brick and stone ones;
• availability of security systems. If you install a combination lock in a house or apartment, take modern measures to protect against burglary, fire or communication failures, the insurance company will definitely take this into account in the process of calculating the cost.

To insure or not to insure property? In the vast majority of cases, the answer to this question depends solely on you. You just need to remember the benefits of this event and competently approach the purchase of a policy. In this case, such shortcomings as the high cost of services of specialized companies, clauses of the contract that do not guarantee you receipt of payments, and many others will be completely leveled, and you will receive a direct benefit.