Necessary and not necessary Insurance

Banks, Insurances & Third Pillar
22

Hi Gents,

Shopping for new private liability and household insurance and need some help to understand few things:

  1. What’s the point of warning to not under-insure household content, otherwise some issues or refusal by insurance. Even if my house items (furniture, electronics, clothes, etc) cost 100k, but if I’m ok to get compensated only 50k, what’s the problem with under-insurance?
  2. How would household item be compensated on 10 year old couch: original purchase price or current value? My guess - equivalent replacement, whatever that would mean.
  3. Why there is usually “theft away” and separate “sport equipment” and “luggage” sections. Isn’t my snowboard or luggage during the travel not part of household items which can get “stolen when away”?
  4. Separate gross negligence clause and of course extra premium:
    a. For household. Isn’t that’s why I’m taking household insurance in the first place - cooked lunch, had to run to krippe… burned the flat and my stuff.
    b. Living in attic, cooked dinner, had to run away, burned rented flat roof. Is that’s what third party liability is for?
23

Do find and read the full insurance contract terms (normally called AVB) of the product you are interested in, they are not so hard to understand.

  1. Often there is a clause setting compensation proportional to the under-insurance rate. E.g. you are insured for 50k while your belongings are actually worth 100k, and the insurer finds that out, they will pay out only 50% of the claim amount (i.e. 25k max).
  2. I think it’s common for household content to insure the new purchase value of equivalent or same item, but read the contract to be sure.
  3. Sports equipment is usually mostly meant to cover things like bicycle (or scooters) theft which typically happens outside of travel. Luggage typically covers loss/delay in transit. Again, read the contract.
  4. a. There are many ways to suffer damage to the household content without falling under gross negligence clause, like having a faulty electrical appliance start fire, or being a victim of break in. However, typically it is indeed worth including the gross negligence cover.
    b. Yes.
24

In this case, it could be considered as gross negligence though (especially in Aargau there has been some cases similar).