Why should I consider a personal roof insurance

Sum insured

The sum insured represents the amount that is paid out to the policyholder when a certain event occurs. In this way, the insurance contract is fulfilled on the part of the insurer. Depending on the type of insurance taken out, the insured amount can have different meanings in detail.

Sum insurance

As part of a sum insurance, the sum insured is a fixed amount that is paid out in any case and is not based on the amount of the actual damage. Thus, the actual damage can be higher, but also lower than the amount that is covered by the insurance. Only the individual framework conditions of the insurance policy decide whether the damage event occurred with a sum insurance. As a rule, life or accident insurance are classic examples of sum insurance.

Damage insurance

Damage insurance is usually a type of insurance in which the actual sum insured covers the damage that has occurred. The sum insured represents the maximum damage that the insurance company is willing to pay. The maximum amount of the damage settlement was agreed in advance. It does not matter whether the actual damage was greater. If the damage is less than the sum insured, the insurer only pays the actual amount of the damage. In this case, one speaks of the sum insured.

Check contract details before signing

Before you take out any insurance, you should check the details of the contract. In this way you know what type of insurance it is and how the sum insured is structured. This is the only way that the sum can fulfill its purpose in the event of damage and protect you financially.

Determination of the sum insured

Determining the correct amount of damage depends largely on the type of insurance. Therefore, you should first understand the different types of insurance before you can determine the right amount of damage for the right insurance. Regardless of the policy, the sum insured should always be chosen so that the greatest possible damage is fully covered.

Make the sum dependent not only on the possible damage, but also on:

  • Your individual situation (number of children, marital status).
  • Your running costs.

Household insurance

Household contents insurance is one of the most important and best-selling insurances in Germany: at least three quarters of all households in Germany have this policy. This is a property insurance for all furnishings and utensils in a household. As a rule, the following damage is covered:

  • Fire damage
  • Water damage
  • Damage from weather
  • Damage caused by criminal offenses

In the context of so-called connections, policyholders can expand the covered items.

With household contents insurance, the entire value of the household effects should always be insured. If the sum insured falls below the actual value of the contents, this can lead to financial problems. Because even if the entire household items were destroyed, the insurance company could only pay out the agreed amount.

Sample calculation

The policyholder has taken out household contents insurance with coverage of 50,000 euros. However, due to a burst water pipe, the actual damage amounts to 90,000 euros. In this case, the policyholder only receives the agreed 50,000 euros and is therefore underinsured and has to pay the remaining 40,000 euros out of pocket.

Overinsurance is expensive

If you have set the sum insured too high, you will pay correspondingly high contributions over a longer period of time. Therefore, every two to three years you should do a household inventory and list all items and their replacement value.

With the help of such a household inventory, the sum insured can be determined comparatively easily. Once you have listed all the items, simply add up the replacement costs - the result is your sum insured.

The following applies here: The higher the quality of the item to be insured, the more it pays to provide detailed documentation based on photos and proof of purchase. As an alternative to drawing up an inventory list, you can take out insurance for a fixed amount per square meter of living space.

Liability insurance

In addition to household insurance, liability insurance is one of the most common types of insurance and is standard in Germany. As a rule, the policyholder insures himself against damage events that occur, which he has caused and for which he would be obliged to pay damages.

As a rule, you can insure yourself against two different types of compensation:

  • The damage offset according to § 280 BGB
    Here the policyholder has committed damage as part of a breach of contractual duty. If, for example, he has spoken to a customer about internal trade secrets contrary to his employment contract, he has to compensate for the resulting damage.
  • The compensation according to § 823 BGB
    Here the policyholder has caused damage to life, body, health or freedom. For example, if you are guilty of an accident in which the other person breaks his arm, you are obliged to pay compensation.

The beneficiary of liability insurance is not the policyholder, but the third party to whom the policyholder has caused damage. In particular, the following damage events are insured:

Personal liabilityTo cover damage in everyday life, for example compensation for pain and suffering in the context of a skiing accident.
Motor vehicle liabilityCases of damage that occurred while using a vehicle.
Pet owner liabilityDamage caused by your own pet.
Professional liabilityProtection for employees, civil servants or freelancers.

This policy is also a damage insurance. However, the sum insured for liability is determined here based on the current value of the goods to be replaced. The damage must be repaired as if it had never occurred (§ 249 BGB).

The average market value of the item on the used market is generally used to determine the sum insured. If the compensation contribution appears to be too low, you can deal with the insurance company with the relevant receipts.

There is not always a used market

It can always happen that there is no second-hand market for the item in question. In this case, the wear and tear value is estimated at the relevant point in time and this is deducted from the new price. This creates the fair value, which is used as a guideline for compensation.

Life insurance

Life insurance is one of the policies with the largest sum insured. As part of this insurance, you can insure yourself against certain life risks that affect you and your relatives. There are two different ways of doing this:

  • Term life insurance
    Term life insurance insures a beneficiary in the event of the death of the policyholder. If the policyholder dies, a relative or an entire family can be financially covered with the sum insured.
  • Endowment life insurance
    Endowment insurance is also known as endowment insurance. If the insured reaches a certain age, the sum insured is paid out to him. In most cases, policyholders use this for private retirement provision.

It is important to calculate the sum in detail, as the policy is comparatively expensive. The following factors influence the sum insured:

  • Loans and liabilities (mortgage loan, etc.)
  • Running costs
  • Individual life risks
  • Health and age
  • Insurance term
  • Amount of income

How high the sum insured for life insurance actually is depends, among other things, on the provider. In most cases this is at least 10,000 euros. The following sums are recommended for the different life situations:

Sum insuredtarget group
Three times the gross annual incomeChildless married couples, couples, families with older children
Five times the gross annual incomeFamilies with small children, single parents
All liabilities + replacement costsBusiness partner (company)

Also consider the following aspects:

  1. The sum insured is subject to inheritance tax, which must be paid.
  2. Think about whether the survivors should only be guaranteed freedom from debt or whether they should be financially secure.

There are also premium-free sums insured

These are sums for which you no longer pay contributions. This is worthwhile, for example, if you have already paid a lot into your life insurance but do not want to continue to pay because of a change in your personal circumstances.

Homeowners Insurance

Homeowners insurance is property insurance. It includes any damage to a residential building that was caused by events through no fault of your own. This includes damage from fire, weather, and tap water damage. In Germany there are currently almost 20 million insurance contracts on residential buildings.

The value of a residential building, which is determined as part of a residential building insurance, is known as the 1914 value. There are four different methods of valuation:

  1. The determination of the enclosed space according to cubic meters
    With this type of valuation, the cubic meter number of the converted living space is determined and multiplied by the value of the 1914 cubic meter number. The result is traditionally presented in Reichsmarks.
  2. The determination of the value by calculating the living space and equipment
    This type of calculation is only possible for a house of construction class 1 or 2. The building must also not have soft roofing. The building value can be determined by square meter using a determination sheet. The building value should then be selected as the sum insured. The method is based on the 1914 model and is therefore given in Reichsmarks.
  3. The determination of the sum insured in 1914 after acquisition costs
    This valuation method is mainly used when calculating the value of new buildings. All costs incurred in the construction of the building are added together. The result is divided by the construction price index of the year of construction and then multiplied by 100.
  4. The determination of an estimated value by an expert
    This method will only be considered if other methods fail and a calculation of the new building value is not necessary. There are additional costs for the report.

Unlimited coverage

Each insurance is subject to maximum coverage. However, there are legal regulations as to how high the minimum coverage has to be:

  • 7.5 million euros for personal injury
  • 1.12 million euros for property damage
  • 50,000 euros in the event of financial loss

An insurance with unlimited coverage, on the other hand, covers damage of any amount - this is often the case with motor insurance.

Uninsurable events

In fact, with almost every type of insurance there are certain events that are excluded. In principle, almost all insurance policies exclude damage caused by deliberate acts or gross negligence. In addition, liability insurance, for example, excludes such damage that the policyholder and any other insured persons themselves suffer.

Even in the case of simple theft, insurance may not be required under certain circumstances, as gross negligence is often assumed. A simple theft would be, for example, stealing a wallet from the terrace without a previous break-in.

Adjustment of the sum insured

For several insurances, including life insurance, it is possible to flexibly adjust the sum insured. This means that the policy can always be tailored to your personal circumstances. You can also avoid the risk of paying overpriced premiums.

Many insurance companies offer dynamic adjustment: the policyholder is sent an adjustment proposal on a regular basis, usually annually. This proposal can then be accepted or rejected. But: A number of providers have stipulated that the right to dynamic adjustment does not apply if the adjustment proposal is rejected for the third time in a row.

In addition, there is a subsequent insurance guarantee for numerous insurance companies: This means that the policyholder can, for example, insure his child at a later date - whether this changes the sum insured depends on the respective policy.

The insured amount can also be changed by the insurer

On the one hand, you can change the sum insured if the insurer allows a dynamic adjustment. Often, however, the sum insured and the premium are also changed after a claim has occurred.

Sum insured in the event of disability

The amount of the insured sum can be determined individually by each policyholder. A member tax has been set for this - this is used to determine the amount of the disability sum that is covered by the insurance. For certain professional groups, such as doctors or musicians, it is particularly important to protect the relevant parts of the body as well as possible.

Expiry benefit and payout

A guaranteed sum insured is the sum that is paid out to the relatives of the insured person in the event of death. The expiry benefit is paid to the insured at the end of an insurance policy and includes both the sum insured and any surpluses.

Who is the sum insured paid to?

This also depends on the insurance: in the case of home contents insurance, the policyholder is paid the sum, in the case of term life insurance it is paid to the specified survivor.