Home contents insurance covers household contents: what belongs to you and is in your home without being fixed to the building. Furniture, clothes, appliances, crockery, sports equipment. The building itself falls under a different insurance policy, which is the owner's responsibility.
Compulsory or not? It depends on the canton
There is no single federal answer, and this is one of the least known Swiss peculiarities. In some cantons, insuring household contents against fire and natural hazards is compulsory.
The canton of Vaud is a documented example: there, insuring household contents against fire and natural hazards is compulsory and is taken out with the cantonal institution, on the basis of the cantonal act of 17 November 1952 on the insurance of buildings and contents against fire and natural hazards (LAIEN, RSV 963.41), amended several times since. The obligation applies to owners as well as to tenants and subtenants.
Where a cantonal obligation exists, it typically covers fire and natural hazards. Theft and water damage then fall under additional, optional cover, taken out separately.
The risks usually covered
A home contents policy is built from a core of cover plus options. The core most often corresponds to the following risks.
- Fire, as well as smoke, lightning and explosions.
- Natural hazards: storm, hail, flooding, avalanche, as defined in the contract.
- Water damage from pipes, household appliances or seepage, in the cases provided for.
- Theft, generally burglary at home, with simple theft away from home often a separate option.
Glass breakage, bicycles, valuables and the contents of the freezer are frequently among the optional extensions rather than in the basic cover.
Underinsurance: the mechanism that catches people out
This is the technical point behind most disappointments after a claim. The federal law on insurance contracts (VVG/LCA) provides that if the sum insured does not reach the replacement value — the situation known as underinsurance — the loss is compensated, unless otherwise agreed, in the proportion that the sum insured bears to the replacement value.
In practice, the rule is proportional, not a mere ceiling. If you insured your contents for half their real value, a partial loss is not paid in full up to the sum insured: it is paid at half. The reduction applies to every claim, not only to a total loss.
The practical consequence is that estimating the value of your belongings is not an administrative formality. It is the variable that determines the amount you will be paid.
What is most often confused with liability insurance
Home contents insurance pays for damage to your own belongings. Private liability insurance compensates third parties for damage you cause them. The same event can involve both: a water leak that damages your belongings and your neighbour's brings in your contents insurance for your things and your liability insurance for theirs.
The two products are often sold together, in a single contract carrying two covers. That does not make them a single insurance, and it is worth knowing which of the two you have actually taken out.
New-for-old value, current value
Two notions decide the amount of a payout, and they do not mean the same thing. New-for-old value is what it would cost to replace an item with an equivalent one today. Current value takes account of the item's wear and age.
A contract may provide for one or the other, or one for certain belongings and the other for the rest. The difference can be considerable on furniture several years old, and it does not show in the premium: it is in the general terms and conditions.
Tenant or owner: what changes
Home contents insurance follows your belongings, not the walls. A tenant therefore insures their contents, while the building is insured by the owner — in most cantons with a cantonal institution, against fire and natural hazards.
This separation comes as a surprise when something happens: a water leak can simultaneously damage the tenant's contents, the owner's building and a neighbour's belongings, and involve three separate covers.
What only your general terms and conditions decide
- The sum insured, and how it was estimated.
- Whether or not there is a waiver of underinsurance.
- The excess, which may differ by risk.
- Which risks are included automatically and which are optional.
- How valuables are treated and the limits applied to them.
- Cover for belongings taken outside the home.
As with liability insurance, there is no standard content imposed by law. Two contracts with the same trade name may cover different things, and only the general terms and conditions are authoritative.