Building insurance and natural disasters

1. Building insurance

Building insurance is the most important insurance for home owners. It covers damage caused to your home by fire and natural hazards, such as storms, hail, flooding, landslides, avalanches and falling rocks. This protects both the building itself and the fixtures in it (e.g. bathtub, doors, fittings, etc.). Movable property, such as furniture, is generally not included; these items are covered by household insurance.

In most cantons, building insurance is compulsory, meaning you must purchase it. In these 19 cantons, home owners must insure their property through the cantonal building insurance: Aargau, Appenzell Ausserrhoden, Basel-Land, Basel-Stadt, Bern, Fribourg, Glarus, Grisons, Jura, Lucerne, Neuchâtel, Nidwalden, St. Gallen, Schaffhausen, Solothurn, Thurgau, Vaud, Zug, Zurich.

In Uri, Schwyz and Obwalden, private insurance can be included in place of the cantonal building insurance.

In Geneva, Ticino, Appenzell Innerrhoden (with the exception of the Oberegg district) and Valais building insurance is not compulsory, but it is highly recommended. Here, too, the building can be insured with a private insurer.

What damage is covered by building insurance?

In general, building insurance covers damage caused by fire or so-called natural hazards. This includes:

• Fire, smoke, heat (as a result of a blaze, lightning strike, etc.)
• Lightning strike, explosion
• Storm damage (storm or tornado with winds of at least 75 km/h)
• Hail damage
• Water damage as a result of flooding
• Snow pressure, falling snow, avalanches
• Falling rocks
• Earthquakes or rockslides
• Falling aircraft or spacecraft

Our tip: Although it may be difficult, it is a good idea to read through the insurance details carefully. It may also be a good idea to conclude additional benefits, such as loss of rent or cover for adjoining structures, such as a garage, pool or garden shed.

What damage is not covered by building insurance?

Damage that is not the result of natural events is generally not covered by building insurance. Among other things, this includes:

• Earthquakes
• Subsidence, earth movements
• Poor construction
• Ground, melt or rainwater than enters the house
• Backwater from the sewer system
• Broken water pipes
• Nuclear accidents
• Pandemics
• War, domestic unrest

Please note: Grossly negligent action may result in the exclusion of insurance protection. As the policyholder, you are obliged to do everything you can to limit the damage as much as possible. This includes, for example, removing computer and TV cords from outlets when you go on holiday, or storing movable objects such as bicycles and garden furniture securely.

Our tip: Keep all receipts because in the event of a claim, you, as the policyholder, will be required to show proof of the value of the items that have been damaged.

Special case of glass: Who pays in the event of broken glass?

Unfortunately, this question isn’t always entirely clear because it depends on what glass has broken. In principle, if the glass belongs to someone else, your own private liability insurance covers the damage that has been caused.

If your own glass breaks, it once again depends – is the glass a permanent building installation or is it a movable object?

Windows, sun room walls, washbasins and ceramic hobs are often covered by building insurance. Damage to tabletops, display cabinets or aquariums are generally covered by household insurance.

Our tip: Review both your building insurance and your household insurance to see what level of glass breakage is covered. If necessary, it may be worth concluding additional insurance.

2. Determine insured sum

Whether it’s a lightning strike, flooding or a storm, if you’ve been affected by a natural disaster and your home has been damaged, you want the insurance company to pay enough money so you can have everything fixed and returned to its original condition. For this reason, buildings are often covered in building insurance for their replacement value. In other words, an estimate is made of the cost to restore the building to the same condition and size if it is damaged.

All of the fittings, such as built-in cupboards, ovens, bathtubs, window shutters, flooring, central air conditioning and heating systems, built-in kitchens, sanitary facilities and electrical systems must be taken into account here. The same goes for ancillary buildings, such as a garage, pool, garden shed, etc. that are located on the insured property.

This estimate is repeated every 12 to 15 years. If the building is old, it may also be insured at the market value, meaning the current value of the building must be determined.

3. Other important insurance for home owners

As a property owner, you need building insurance to protect against unforeseen disasters. But this does not cover all possible damage. You should also consider the following types of insurance:

Recommended: Water damage insurance

Some water damage is considered to be damage from natural events (for example, flooding) and is therefore covered by building insurance.

But if a pipe bursts or water backs up in the sewer system as a result of heavy rain and gets into the house, the damage will only be covered if you have concluded additional and voluntary water damage insurance.

Different insurers offer different benefits and it is therefore a good idea to compare the contract terms and conditions. In general, water damage insurance covers the following situations:

• Ground, melt or rainwater than enters the house
• Backwater from the sewer system
• Broken water pipes
• Leaking water pipes
• A leaking aquarium

Think about earthquake insurance

Although an earthquake is a natural hazard, damage caused by an earthquake is not covered by building insurance. If you wish to insure this event, you must conclude supplemental earthquake insurance.

While earthquakes are rare in Switzerland, the extent of the damage can be significant. It is therefore a good idea to consider supplemental insurance.

Earthquake insurance generally covers the following:

• Immediate measures
• Living expenses
• Clean-up, demolition
• Restoration and repairs to damage to the building, premises or garden
• Loss of rent
• Furnishings and household contents
• Looting

What happens if I do not have earthquake insurance and my house is damaged by an earthquake?

In most cantons, the cantonal building insurance has a pool for earthquake insurance that would voluntarily pay out a maximum of CHF 2 billion. The current value of all buildings, however, is CHF 1.6 trillion. In the worst case, this money therefore would not be sufficient to cover all damage.

In the cantons of Geneva, Uri, Schwyz, Ticino, Appenzell Innerrhoden, Valais and Obwalden, private insurers had voluntarily made available a maximum cover of CHF 200 million through the end of 2010. They have now withdrawn this as the pool has been dissolved. As a result, there is no official cover here.

By contrast, Zurich is well positioned. In this canton, buildings are covered to a limited extent by the cantonal building insurance, including against earthquakes. The canton has access to a pool of CHF 1 billion.

However, building insurers (cantonal and private) have no comprehensive insurance solution in the event of an earthquake. It is therefore worth reviewing whether having your own earthquake insurance is a good idea.

Our tip: Building, water damage, household and liability insurance can be concluded individually or in combination. Once you have decided which insurance policies you want, it is a good idea to determine whether it is cheaper to conclude them individually or in combination from a single provider.

4. Assess and minimise risks

Especially when considering supplemental insurance it is helpful to research the actual likelihood of the risk of a disaster and the level of the resulting damage. The amount of the insurance premium is based on this risk (among other factors). For example, solid construction houses with a hard roof are less expensive to insure than wooden houses or houses with a flat roof.

You can learn more about the risks from the cantonal building insurance providers. You can also look at the risk map for your municipality, which shows the risks of flooding, subsidence, rock falls, avalanches, etc. It can also help to look at flooding risk maps and obtain information from the local fire service and local residents.

Our tip: Better safe than sorry. While there is no 100% protection against natural disasters, prevention and the right measures can at least reduce any damage. For this reason, it is highly advisable to maintain your home well, particularly the building shell (roof, façade). Tall, crooked or diseased trees near your house should be cut down. Doors and windows should be well sealed. Electricity metres, distribution systems, washing machines, driers, heating and building installations should either be raised or not placed in the basement in the first place. Heating oil tanks must be secured so they do not float off or tip over if there is flooding. Subscribe to Weather alerts, which can provide timely warnings about bad weather in your region.

Learn more about the following types of insurance as well:

Construction insurance
Owner’s insurance
Household insurance
Private liability insurance
Legal protection insurance
Life insurance