Buildings, contents and liability are three different things, and a surprising number of policies quietly leave one of them thin. Here is how to read yours properly.
Home insurance is the policy people buy quickly and then never re-read. That is a mistake, because the gap between two policies at a similar price can be enormous — and the difference only becomes visible at the moment you claim.
The three components
Every home policy is really three products bundled together.
Buildings cover protects the structure: walls, roof, floors, fitted kitchens and bathrooms, and usually permanent fixtures. If you own the property, you need this. If you rent, you do not — it is the landlord's responsibility.
Contents cover protects everything you would take with you if you moved. Furniture, electronics, clothing, appliances that are not built in.
Liability cover protects you when something in your home causes harm to somebody else — a leak that damages the flat below, a visitor injured on your stairs. This is the component people pay least attention to and the one with the largest potential losses.
Where policies quietly fall short
Rebuild cost, not market value
Buildings cover should be set to the cost of rebuilding the property, which is a different number from what you paid for it and different again from what it would sell for. Land value is not part of a rebuild. Set the figure too low and most insurers apply infraseguro — proportional underinsurance — reducing every claim by the same percentage you were underinsured, even small ones.
Single-item limits on contents
Contents cover typically carries a per-item cap, often somewhere between €600 and €3,000, above which an item must be specifically listed. Jewellery, watches, bicycles, cameras and musical instruments are the usual casualties. A €40,000 contents policy will not pay €8,000 for an unlisted watch.
Unoccupancy clauses
This one matters enormously for second homes. Most policies restrict or void cover if the property is left unoccupied beyond a stated period — commonly 30 to 60 consecutive days. If you use a property seasonally, you need a policy written for that, not a standard residential one.
Water damage exclusions
Water is the most common household claim by a wide margin. Read how yours is worded. Damage from a burst pipe is nearly always covered. Damage from gradual seepage, failed sealant, or a leak you could reasonably have noticed often is not.
A short annual review
Once a year, spend fifteen minutes on this:
- Has the rebuild cost moved? Construction inflation has been significant, and a sum insured set five years ago is very likely low now.
- Have you bought anything that exceeds the single-item limit?
- Is the property's occupancy pattern still what you declared?
- Is your liability limit still sensible? Increasing it is usually inexpensive.
Documentation
Photograph each room, keep receipts for anything substantial, and store both somewhere that is not in the house. Claims are settled far faster when the evidence already exists, and a phone full of photographs is worth more at claim time than any amount of arguing afterwards.
If you want someone to read your existing schedule and tell you where the gaps are, we are happy to look.