Necessary and not necessary Insurance

Hi All,
So I wrote back while when I read that in Switzerland people are having unnecessary insurances which they don’t even need,
Any inputs on what is needed and what is not?
Recently I was approached by insurances to get insurance for lawyer, car, any other damages etc etc which I am evaluating now…
i would appreciate if you can shed some light on the what you will consider damn important and what is just wasting money…
thank you
Mona

1 Like

You need personal liability insurance. Apart from that I only have the mandatory insurances. I don’t have Hausratsversicherung as I don’t own anything I can’t cover myself.

Of course it depends on your situation.

4 Likes

Maybe my article might help you:

1 Like

There is a mistake in your guide. Private liability insurance is actually not mandatory in Switzerland. Except if you own a dog in some cantons (and maybe some other cases).

Though personnally, I would recommend everyone to have one, except if having about 10 MCHF to your name maybe.

4 Likes

An insurance is just a way to transfer a risk to another company which you’re not able to cover by yourself. The problem is here, the less money you have, the more insurance you need, and the more money you have, the less insurance you need.

  • Basic health insurance is mandatory. If you could pay 2500 CHF by yourself, you should have your franchise at this level, so the insurance covers only stuff beyond that, but it makes your premium much lower. I don’t think any additional health insurances make any sense. You can save a lot of money through going to a specific general practitioner who sends you to a specialist if needed. Also, if you need an operation that cannot be made in your canton, they will admit you to a hospital outside even though it’s not covered theoretically. You just can’t choose a hospital outside of your canton if you just broke your arm. Also dental insurance is not needed IMHO, if your child has significant problems with the jaw, it will be paid for by the IV, no need for an insurance. Fixing a whole, taking out of tooth, etc. you can easily pay by yourself. No need for an insurance. And even in the case you need to replace all your teeth when you’re 60, and it costs you 20’000 CHF, it’s probably still cheaper to pay it out of your pocked from your reserves rather than paying a considerable amount of money every year for an insurance.

  • If you have a car, you need a liability insurance for it at least. Depending on how expensive the car is, it makes sense to get a bit better insurance than only liability. But also here, make sure to specifically choose exactly what you need. Usually fixed packages contain a lot of stuff you will never need and have way too low deductibles. You don’t need an insurance with a 200 CHF deductible. Just make it 3000 CHF or so and pay much less premium because everything below that you can pay on your own. Also car roadside assistance is not needed, the come to help you anyway, you just pay for it. Often it’s already included with your car etc. so make sure there is no unnecessary double coverage.

  • Liability insurance: Well in most cases you don’t need it probably, I can’t imagine a case where you would have to pay several thousands of CHF suddenly. But it’s also quite cheap to get so that one is probable the one that makes most sense outside the mandatory ones.

  • Household insurance: Depends how much stuff you own. If your house or flat burns and you lose around 150’000 CHF worth of things, it’s probably worth to get one. If not, then skip it.

  • Legal insurance: Legal stuff is very expensive. The problem with law insurances is that the stuff that will most likely happen and will be expensive, won’t be covered. The stuff that is unlikely to happen or easily to Google on the internet, will be covered. I would say legal insurances in most cases are not worth it at all. It is very very unlikely that a legal insurance will ever represent you in court. If you’re lucky, you get a “good will” answer in written form from a legal student that says nothing and you could get a better answer for 145 CHF one time fee on sites such as SwissAnwalt. I had it and in two cases were I needed it I didn’t get help. Will never make one again.

  • Travel insurance: Maybe on an ad-hoc basis or if it’s covered by your Credit Card. I wouldn’t buy anymore an insurance in addition when I book something. Would have needed it to get unpaid costs back during Covid but nobody was willing to pay, phone calls, emails, etc. remain unanswered. I guess it’s not worth it in most cases.

Any other insurances? Can’t think of any that would make sense.

In general: There is no need for an insurance and for deductibles that you can easily cover by yourself. The price for going with such insurances and deductibles are too high and usually not worth it. So, insure only what you really need and what you can’t easily cover on your own with deductibles that make sense (as high as possible).

4 Likes

You hit someone skiing, he gets physically impaired and he is the sole earner of the family → you are liable for his salary. Sure, it is not gonna all come at once, but it is a huge financial risk. Also, it covers in general damages you do to a rental flat…

10 Likes

Make sure to not underestimate the value of your furniture in your household insurance or in your ECA (specific cantonal insurence company in charge of covering the risk against fire and natural hazards).

In case of a fire for example, if the experts estimate that you underevaluated your furniture by 50% (to save some few CHF on your yearly premium) you will be charged 50% of all the costs generated by the cleaning operation, rellocation and so forth. Not sure about the % and what can be at your charge, but do not be underinsured on that risk.
See at the bottom of the page here.

The private liability insurance is also important if you have a bicycle as there is no longer a separate liability insurance for that.

:heart_eyes: thank you for your reply. It does help a lot.

I would absolutely recommend one if you ride a bicycle.

2 Likes

This is a must. It’s even more important than health insurance IMO.

5 Likes

Yes, and not to forget: It also acts as a legal insurance, if somebody wants to sue you and the disputed matter falls under the insurance policy.

I’d rather expect, without knowing any statistics, that the problem in many cases is less unneeded insurance policies but rather multiple policies for the same things. How many people might have roadside assistance through their car insurance and a TCS membership? Separate travel assistance for things covered through the credit card? Or legal insurance to protect them against being sued, while most cases are already covered by liability insurance.

3 Likes

Thanks for bringing this one up.
I know I took it out at some point, but can’t remember exactly why (:rofl: might have been when I started leasing the car; no longer the case).

So, in which case would it make sense to have / take out one?
Only if you are getting ready to initiate a legal dispute?

In my opinion, get as little insurance as possible.

  • Personal liability insurance has paid off for me because i rent, but the chances of having a major liability case opened against you are much smaller.
  • Legal insurance only if you have good reason to believe you may become tangled in an expensive legal case e.g. if you own property. I’ve never had it and never needed it.
  • Supplemental health insurance has paid off for the kids because of dental/orthodontic cover and unlimited medical checkups. I wouldn’t see it as necessary for myself though.
  • Term life insurance makes sense for me because I have a big family. But you already have survivors insurance from the OASI, your pension fund, and accident insurance, so this one is more of a luxury, and pointless if you don’t have dependents.
3 Likes

I took one when I left a previous employer with a non-compete agreement. In my opinion, legal protection policies are worth it if you want to protect yourself against your employer (you have a job with responsibilities and they could try to turn on you and wash their own hands in case of trouble, or could try to fire you with cause for no real good reason) or your landlord (outside of the scope that would be covered by a liability policy, so actions initiated by the landlord themselves like rent changes, works they are wanting to do in your unit or lease cancellation without your agreement).

It’s basically a way to give yourself the means to fight the actions of others with negative impact toward you, provided the field they’re related to falls in the scope of the policy. It’s not really a way to go to court and win your case, the insurance will defend the cheapest option that still protects your interests so they may choose to go for an agreement where they pay something rather than going to court if that’s cheaper than the later. Going to court is a time and nerve consuming experience, even when you’re undeniably in the right so I don’t blame them for that.

I’d take one at the start of one’s career and keep it until one’s able to pay for their own litigation costs. Trouble with the employer may mean you don’t have a salary anymore when you’re fighting (because the subject of the litigation is unwarranted fireing, with potential seizure of salary/bonus by the now former employer) while trouble with the landlord may mean you now don’t have a roof anymore. Both are low probability, high impact scenarios with high costs to cover for it from your own pocket.

2 Likes

Thanks for the detailed reply.

So it indeed sounds like something (most) everyone should consider having.

I don’t read that sentiment around here and on linked resources. :slight_smile:

I would generally say: If you have to sue somebody to defend your rights. Luckily, I’ve never been in that situation, but @Wolverine’s examples make very much sense.

Not everything that’s mustachian works for all of us. It really depends. If you think you need such an insurance policy, just get yourself one. Notice that some policies have blocking periods for some topics, though.

2 Likes

Btw just found this: Mustachian personal legal insurance

1 Like

I wouldn’t say that, it’s a fairly expensive insurance. If you’re a waiter or self-employed, it probably doesn’t make that much sense. The personal liability is the only non-mandatory insurance that I’d very strongly recommand to everybody.

I’d say legal insurance really only becomes very useful if you’re employed and have important responsabilities, which I guess most of us probably do. There’s also a point where self-insuring probably becomes the better option.

3 Likes

A bit related to insurance topic, I am about to shop for a new Bluetooth speaker on Galaxus.ch.
They offer a warranty extension for 3 additional years for 11,5% of the retail price.
I neved used it before but as it is for a gift I thought it could be useful if it breaks after 3 years of use (battery or other electronic fault).
Did anyone on the forum bought one and used it ?

By reading and partipating to this forum, you confirm you have read and agree with the disclaimer presented on http://www.mustachianpost.com/
En lisant et participant à ce forum, vous confirmez avoir lu et être d'accord avec l'avis de dégagement de responsabilité présenté sur http://www.mustachianpost.com/fr/