03 maart 2020
You are confronted with a number of compulsory and necessary insurances when buying a house. In this blog we will explain some of the most important ones and why you can’t make do without them.
When you apply for a mortgage loan, the mortgage provider requires you to have a good home insurance. It is compulsory and you can’t ignore it. A household and home insurance covers your material damage as a result of fire (and/or extinguishing), burglary, explosion and weather damage.
Household insurance covers your belongings (furniture, for example), while your house insurance covers damage to your property. It is recommended to take out both insurances at the same company so that in the event of damage there will be no discussion as to which company should pay for what.
Whenever you damage property or another person you are liable by law, even when you did not cause the damage yourself – for example when a burst water pipe causes damage to your neighbours’ property. Liability is not compulsory but highly recommended: the damage and repair costs can be very high.
In the case of a death risk insurance, the insurance company will pay out a fixed amount to your next of kin. This insurance will avoid financial problems for your partner or children should you pass away, and make sure they can still pay for their living expenses without your income.
Death risk insurance used to be mandatory for a mortgage with the National Mortgage Guarantee, but is not anymore as of January 1st 2018 – although the bank might still require you to have one. It usually is a good idea to take out a death risk insurance.
With a legal expenses insurance you are assured of legal assistance should a dispute occur. With many insurance companies you can choose which modules you want to insure yourself for. For example, if you have a dispute about a (purchase or rental) contract or if there are (hidden) defects in your new home. Our advice is to take out legal assistance insurance before you buy a house. The purchase of the new home will also be covered by the insurance.
With housing expenses insurance (also called payment protection) you ensure that you can continue to pay your mortgage should you become incapacitated for work or unemployed. Housing expenses insurance is often offered in combination with a loan or a mortgage.
We hope this list will come in handy when you are exploring the housing market and you want to pursue serious options. Are you still unsure what kind of insurances you will need? We are more than happy to help. Or do you need independent advice about all sorts of financial questions? Our partners at Huis en Hypotheek Veldhoven are at your service as well.