Which insurance policies do I absolutely need as a property owner in Switzerland?

Main part: The security apparatus

structure the topic of mandatory insurance for property owners , we consider the three main risks: damage to the property, liability to third parties, and financial risks.

Building insurance: The absolute core

At the top of the list of mandatory insurances for property owners is the protection of the building structure against fire and natural hazards.

In Switzerland, this insurance is mandatory in almost all cantons. It covers damage caused by fire, smoke, lightning, explosion, and natural disasters such as storms, hail, floods, or avalanches.

• The monopoly system: In 19 cantons ( not including the so-called GUSTAVO cantons , see glossary), the cantonal building insurance (KGV) is the sole provider. You must insure yourself with them. This is a classic case of mandatory insurance for property owners .
• The GUSTAVO cantons: In Geneva, Uri, Schwyz, Ticino, Appenzell Innerrhoden, Valais and Obwalden there is no state monopoly. Here you can – and must – take out this mandatory insurance for property owners with a private company (in some of these cantons it is voluntary, but required by the bank).

Without proof of this mandatory insurance for property owners, no bank will disburse the mortgage. It secures the replacement value of the house so that it can be rebuilt after a total loss.

Building liability insurance: Protection against multi-million-euro lawsuits

An often underestimated aspect of mandatory insurance for property owners concerns liability. According to Article 58 of the Swiss Code of Obligations (OR), as the owner of a building, you are liable for damages. This means you are responsible for damages caused by defects in your building, even if you are not at fault.

• Example: A brick falls from the roof onto a passerby. Or the postman slips on your icy path.
• The necessity: For homeowners, this coverage is often included in their personal liability insurance, but this should be verified. For condominium owners' associations, separate building liability insurance is practically mandatory for property owners .

Anyone who ignores this policy in the portfolio of mandatory insurances for property owners is liable with their entire private assets.

Building water damage insurance: The "hidden" obligation

Many property owners mistakenly believe that water damage is covered by the cantonal building insurance. This is incorrect. The cantonal insurance pays out in the event of flooding (natural hazard damage), but not in the case of a burst pipe inside the building.

• The problem: A leaking pipe in the wall or a backup from the sewer system causes enormous costs.
• The status: Although not usually legally required, building water damage insurance is considered a de facto essential insurance for property owners . Banks often require it, and the risk is too high to bear alone. It therefore belongs in every package of mandatory insurance for property owners .

Construction insurance: Only relevant for those undertaking renovations

Are you buying a new building or planning major renovations? Then the range of mandatory insurance policies for property owners expands .

• Its function: It's like comprehensive insurance for the construction site. It pays out if the half-finished wall collapses, materials are stolen, or vandals cause damage.
• The relevance: For the duration of the renovation, this is one of the mandatory insurances for property owners to avoid being left with construction damage for which no tradesman is liable.

Earthquake insurance: The major risk

Switzerland is an earthquake-prone country (especially Valais and Basel). Nevertheless, earthquake insurance is not a legally mandatory insurance for property owners in most cantons (except in some cases through pools in Zurich/Bern with limited sums) .

• The dilemma: Since the cantonal insurance does not pay out in the event of an earthquake, many property owners are left with nothing after a quake.
• The recommendation: Mortgage lenders are increasingly demanding it. Anyone wanting to eliminate the risk of total loss must add this policy to the mandatory insurance for property owners , even if it is expensive.

Conclusion

The question "Which insurance policies do I absolutely need?" cannot be answered generally, as it depends on where you live. Legally, mandatory insurance policies for property owners are often limited to fire and natural disasters. In practice – dictated by banks and common sense – the list is longer.

Essential insurance policies for property owners include building insurance (fire/natural hazards), building liability insurance, and building water damage insurance. Skimping on these is a false economy. Furthermore, check every few years whether the sum insured still corresponds to the value of the house to avoid underinsurance with your mandatory property insurance policies . A solid safety net is the foundation of any successful real estate strategy.

If you want to ensure that your portfolio of mandatory insurance policies for property owners is complete, or if you are looking for affordable providers for additional coverage, Loft offers neutral comparisons and analyses for your protection.

Glossary

• Mandatory insurance for property owners: Collective term for policies that are legally (mandatory) or contractually (by the bank) required to protect the property.
• GUSTAVO cantons: The cantons (GE, UR, SZ, TI, AI, VS, OW) where there is no state monopoly. Here, mandatory insurance for property owners must be taken out privately.
• Property owner liability: The statutory liability (Art. 58 OR) for damages caused by building defects. This makes liability insurance one of the most important mandatory insurances for property owners .
• Natural hazard damage: Damage caused by natural events (storms, hail). This is the core content of most mandatory insurance policies for property owners .
• Building water damage insurance: Covers damage caused by tap water. It is usually not one of the legally required insurances for property owners , but it is essential for owners.