What insurance policies do I need when buying a home?

The protective shield for your real estate: These policies are essential and optional extras.

The portfolio of insurance policies for home purchase can be divided into three categories: protection of the building, protection against third-party liability claims, and protection of financing.

The basis: Building insurance (fire and natural hazards)

At the top of the list of insurance options for homeowners is the protection of the building's structure. In Switzerland, building insurance against fire and natural hazards is mandatory in almost all cantons (except Geneva, Ticino, Valais, and Appenzell Innerrhoden – the so-called GUSTAVO cantons).

• Scope: This basic insurance for home purchase covers damage caused by fire, smoke, lightning, explosion, and natural events such as storms, hail, floods, or avalanches.
• The provider: In 19 cantons (e.g., Zurich, Bern), the cantonal building insurance (KGV) has a monopoly. You cannot choose the provider. In the GUSTAVO cantons, you must take out this coverage with a private company.
• The significance: Without this component of homeownership insurance, no bank will grant you a mortgage. It secures the rebuilding value of the house.

Important to know: This insurance only covers the building itself, not the water that leaks from a burst pipe inside.

The "second skin": Building water insurance and glass breakage

This is often where the biggest misunderstanding arises regarding homeownership insurance . Many people believe that water damage is covered by the cantonal insurance. This is incorrect.

Building water damage insurance is one of the most important voluntary insurances for homeownership .

• The risk: A leaking pipe in the wall, sewage backup, or rainwater penetrating through the roof. Such damage is extremely expensive (drying, opening up the walls).
• Additionally: Building glass insurance is also part of the insurance package for homeowners . It covers windows, glass doors, and glass-ceramic cooktops. In many cantons, this is voluntary, but highly recommended.

Protection against claims: Building liability insurance

As a tenant, you have personal liability insurance. As a homeowner, you need to upgrade your homeownership insurance .

According to Art. 58 OR, as the owner of the building, you are liable (i.e., even without your own fault) for defects in your building.

• The scenario: A brick falls from the roof onto a parked car, or the postman slips on your unsalted path.
• The solution: Building liability insurance defends against unjustified claims and pays for justified damages. For single-family homeowners, it is often included in personal liability insurance (check!), while for condominium owners' associations, it is usually taken out separately as one of the collective insurance policies for homeownership .

Anyone who ignores this part of homeownership insurance is liable with their entire private assets for personal injuries, which can quickly amount to millions.

Financial protection: Term life insurance and disability insurance

Homeownership insurance does n't just protect the property, it also protects people. Mortgage affordability is based on your income. If that disappears, your house is at risk.

• Death risk: If a main breadwinner dies, the family often has to sell the house because the mortgage is no longer affordable. A term life insurance policy (often linked to the amortization of the third pillar pension) is therefore an essential part of homeownership insurance . It covers the financial gap so that the surviving family members can remain in their home.
• Disability: In cases of disability due to illness, state pensions often only cover approximately 60-70% of the last salary. This is rarely sufficient to cover mortgage payments. Disability insurance closes this gap and is one of the smartest insurance options for homeowners , ensuring long-term ownership of their property.

Special case: Construction and building owner's liability insurance

Are you not buying an existing property, but building a new one or undertaking extensive renovations? Then your insurance needs for homeownership will change .

• Construction insurance: It's like comprehensive insurance for a building project. It pays out if a half-finished wall collapses or vandals wreak havoc on the construction site.
• Builder's liability insurance: It protects you if third parties are harmed on your construction site.

These temporary insurance policies for home purchases are mandatory during the construction phase to avoid being left with construction damage for which no tradesman wants to take responsibility.

Earthquake insurance: The underestimated risk

Earthquakes are rare in Switzerland, but when they do occur, they are severe. Cantonal building insurance usually does not cover earthquakes (except in the canton of Zurich, where coverage is provided through a pool, but with a very limited sum).

• The option: Private earthquake insurance is one of the optional insurances for homeownership .
• The trade-off: The premiums are relatively high, as is the deductible. Nevertheless, a severe earthquake can mean total loss. Whether you include this policy in your home insurance portfolio depends on your risk tolerance and the earthquake zone (e.g., Valais, Basel).

Summary of priorities

homeownership insurance market wants to sell you a lot. Prioritize as follows:

• Mandatory : Building insurance (fire/natural hazards) – legally required.
• Desired: Building liability and building water damage insurance – essential.
• Recommended: Protection against death and disability risks – safeguards the family.
• Can include : glass breakage, earthquakes, environmental insurance – depending on budget and property.

Conclusion

The question "Which insurance policies do I need when buying a home?" requires an individual analysis. There is no one-size-fits-all solution. Choosing the right insurance for homeownership is a balancing act between underinsurance (risk to one's livelihood) and overinsurance (wasting money).

The most important thing is to be aware of the gaps in your coverage. Don't rely on the assumption that "the state will cover everything." Cantonal building insurance provides a good foundation, but without private add-ons like water damage and liability coverage, your protection is incomplete. Review your homeownership insurance policies every few years, especially after renovations, to avoid being underinsured. A solid foundation of homeownership insurance will ensure you sleep soundly in your own home, even during a storm.

If you want to know exactly which coverage amounts are appropriate for your specific property or where there are potential savings in your current home insurance offer, Loft offers neutral comparisons and analyses to optimize your protection.

Glossary

• Homeownership insurance: The collective term for all policies (building, liability, water, risk) that are necessary to secure property ownership and financing.
• Owner's liability: The legal obligation (Art. 58 of the Swiss Code of Obligations) of the homeowner to be liable for damages caused by defects in the building. Building liability insurance is one of the most important types of insurance for homeowners in this regard.
• GUSTAVO cantons: The cantons (GE, UR, SZ, TI, AI, VS, OW) where there is no monopoly and building insurance must be taken out privately – an important aspect when choosing insurance for home purchase .
• Natural hazard damage: Damage caused by natural forces (storms, hail, floods). This is usually covered by mandatory insurance and forms the core of homeownership insurance .
• Amortization protection: Securing mortgage repayments through a term life insurance policy. This is one of the financial insurance options for homeownership .