In 2020, there were around 265,000 households in Luxembourg, including more than 170,000 homeowners. Although home insurance is not compulsory in the Grand Duchy, it is strongly recommended as protection against the unexpected. For tenants, it is often required by the landlord. However, many policyholders overlook certain crucial details that can cost them dearly in the event of a claim.
Before taking out a policy, here are six common mistakes to avoid to ensure that your cover is perfectly tailored to your needs.
1. Underestimating the value of your possessions
Example : Imagine you declare the value of your furniture at €10,000 when it's actually worth €25,000. In the event of a fire, the compensation will be proportional to the declared value, and you will receive only 40% of what you should have received. Some families have been in this situation after a burglary, finding themselves underinsured after having undervalued their possessions for fear of paying a higher insurance premium.
Make a detailed inventory, room by room, and keep invoices, photos and videos of your possessions. Use a fireproof box for valuable items or save digital copies in the cloud.
2. Ignore cover exclusions
Example: Someone was unpleasantly surprised to discover that damage caused by their pets was not covered. After her dog damaged part of her house, she had to pay for everything out of her own pocket. If she had read her policy carefully, she could have adjusted her cover.
Read the policy exclusions carefully (damage caused by third parties, acts of vandalism, etc.). If you have pets, for example, make sure that any damage they might cause is covered.
3. Focus only on the price
Example: During a storm, a house suffered serious roof damage. The owner, who had opted for low-cost insurance, discovered that his cover did not include storm-related risks. The result: several thousand euros worth of repairs at his own expense.
Don't choose insurance just because it's cheap. Compare the reimbursement limits, exclusions and excesses to make sure the cover is comprehensive.
4. Don't compare insurance offers
Example : A tenant has taken out home insurance without checking other options. When water damage flooded his flat, he realised that the cover offered was limited compared with that of another company, which offered better cover for a similar price.
Take the time to compare the different offers available online and in branches. Compare not only the prices, but also the cover, deductibles and compensation limits to choose the cover that best suits your situation.
5. Neglecting excesses
Example : A couple has opted for insurance with a low premium but a high excess of €1,500. After a minor claim, the repairs came to €2,000, and they had to pay 75% of the bill. In the end, they saved little on the premium but lost a lot on the excess.
Check the deductible amounts before taking out insurance. At Foyer Lux-assurances, we offer options with no excess, guaranteeing you full cover at no extra cost in the event of a claim.
6. Forget legal protection
Example : A homeowner had a dispute with his contractor over poorly carried out work. Without legal protection, he had to pay several thousand euros in legal fees and court proceedings.
Legal expenses cover is an essential element that is often underestimated. It can cover part of the legal costs in the event of a dispute, whether with neighbours, businesses or even tenants.
Avoiding these mistakes when taking out home insurance will help you to ensure that your cover is tailored to your needs and protect you from unpleasant surprises. Be careful about the value of your possessions, read the exclusions carefully, compare quotes and don't overlook essential options such as legal protection. This will give you peace of mind in the event of a claim.
Comments