According to the findings of KB Pojišťovna, more than two thirds of people may have their property incorrectly insured.
Fires alone caused almost six billion crowns of damage in the Czech Republic last year, with a large proportion of fires occurring in households. According to the statistics of the Fire Rescue Service of the Czech Republic, the number of fires is increasing as well as the damage they cause. Last year alone, there were a total of 5,880 fires in households, i.e. compared to the previous year, there was an increase in the number of fires by eleven percent. Total damage from fires then increased by 31 percent.
Last year, according to data from the Czech Insurance Association, a total of 271,834 insurance events were reported. In an unusual way, damages caused by storms were at the top, with almost 50,000 reported. Damages caused as a result of floods, thefts, vandalism or overvoltages in the electrical network also hold high numbers. One of the most common insurance events is plumbing damage, of which Czechs reported over 44,000 last year.
It is no news that…
Property insurance is paid for all insurance events. However, it may depend on what type of insurance you have taken out (property or home insurance) and whether you have already had so-called underinsurance. In such a situation, in the event of damage, you might not receive full compensation at all. And that’s just because you have your insurance set up wrong.
Are you actively interested in the status of your household/property insurance?
Yes, I regularly revise the insurance contract at least every two years.
No, but I rely on regular contact from the insurance company.
No, I don’t have insurance at all.
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How about home insurance?
“Calculate the value of household property in current prices and set the insurance amount accordingly. However, it is still necessary to monitor the so-called maximum limits in insurance contracts, because for some things or insured risks the insurance company may have set an upper limit. For example, some insurance policies have an insufficient limit for damage caused by an overvoltage in the electrical network, which can destroy all electronics worth tens of thousands of crowns.” points out Martin Svoboda, product manager of KB Pojišťovna.
That’s why it’s ideal to choose such household insurance that sets as few limits as possible and reimburses damages to the insured property in the value of the prices of new items. However, it is always necessary to declare everything that you want to include in the insurance.
How to insure real estate?
Property insurance must be set up to provide full insurance coverage. In most cases, this means regularly verifying the value of the property and adjusting the insurance amount accordingly. This is because so-called underinsurance could occur.
Real estate prices have risen sharply in recent years, but property owners have not increased their insurance sums accordingly. An apartment in Prague, which a few years ago cost three million crowns, costs perhaps six million today. However, the sum insured is still only three million. This situation is called property underinsurance. In the event of a claim, the insurance company can proportionally reduce the paid insurance benefit by up to half.
Regular property insurance should be reviewed every two years. However, a much more comfortable option is insurance, which does not specify the insurance amount in the contract. The threat of underinsurance is thus eliminated and the property will always be assessed according to the current value for which it could be rebuilt. “For clients, this method solves not only the increase in the value of the property, for example after reconstruction, but also the increase in its price over time,” adds Martin Svoboda from KB Pojišťovna, which is the only one on the Czech market to offer this type of property insurance.
But it also provides other benefits, such as payment for replacement accommodation in the amount of up to 10,000 crowns or payment of mortgage installments for a period of up to one year if total reconstruction is necessary to repair major damage. The insurance also includes free round-the-clock assistance services, which come in handy, for example, if the door is slammed or the keys are lost.
Insurance is also suitable for renters
Little is known that it is advisable to take out insurance not only when you own an apartment, but also when you live in a rental. Although the property you live in is not yours, it is possible to insure your household – in which case the insurance will cover your personal belongings, equipment or electronics. And whether a thief comes or a natural disaster, insurance will help you. Civil liability insurance is also a good idea, which will save you the cost of paying for any damage you may accidentally cause to your neighbors.
“If the client wants to take advantage of our property insurance immediately, he does not have to wait for the end of the notice period with his existing insurance company, but can use the so-called difference insurance, which is also free for up to one year. This insurance will cover any differences in insurance benefits between the existing insurance and ours, until the end of the insurance with the existing insurance company.” adds Martin Svoboda another benefit of KB Pojišťovna’s services.