Insurance when buying a home: house, contents and handover

The short answer depends on whether you are buying a house or an owner-occupied flat (ejerlejlighed).

With a house, the building normally needs its own buildings insurance (husforsikring). If the house is mortgaged, the lender will require it to have fire insurance. With an owner-occupied flat, the building is normally insured through the owners' association (ejerforening), but you need to check what the association's policy actually covers.

In both cases, the contents insurance (indboforsikring) is your own. And change-of-ownership insurance (ejerskifteforsikring) is a third, entirely separate policy with a different purpose.

Short answer

The most important insurance policies around a home purchase are typically:

The insurance policies need to fit with the purchase agreement (købsaftale). The start date must take into account when the risk passes to you, and whether you get a right of disposal (dispositionsret) before the ordinary handover day (overtagelsesdag).

In brief

• Buildings insurance and contents insurance do not cover the same things.
• Buildings insurance is not generally required by law.
• For a mortgaged house, the lender normally requires fire insurance.
• With owner-occupied flats, the owners' association normally insures the building, but not necessarily everything inside your flat.
• Contents insurance normally also includes private liability and legal expenses cover.
• Change-of-ownership insurance concerns certain hidden defects from before the handover.
• Buildings insurance concerns damage during the insurance period, according to the policy terms.
• Cover during the move depends on your policy and the agreement with the removal company.
• Major renovations may require a special insurance policy.

What is the difference between home, contents and change-of-ownership insurance?

The words are close. The cover is not.

Imagine a house with furniture, a computer and bicycles inside.

• Buildings insurance looks at the building
• Contents insurance looks at the things you can take with you
• Change-of-ownership insurance looks at certain hidden defects that already existed when you took over

This is a simplification, but it makes it easier to get started.

A claim can still fall into a grey area. A concealed pipe, a fitted kitchen or water damage can involve several policies and liability. That is why the policy's definitions and exclusions matter more than the name of the product.

Buildings insurance

As a starting point, buildings insurance covers sudden damage to the insured house according to the chosen covers and terms. The policy can consist of fire cover, other building covers and various add-ons.^[1]

Among other things, it can include damage caused by:

• Fire
• Storms
• Water
• Short circuits
• Break-ins to the building
• Burst concealed pipes or service pipes, if that cover has been chosen
• Rot or insects, if that cover has been chosen

The list is not a guarantee of cover. The cause, maintenance, age, exclusions and excess can change the outcome.

What counts as part of the building

Buildings insurance normally concerns the house and the fixed installations. These can include:

• Roof, walls and floors
• Fixed electrical and plumbing installations
• Fitted kitchen
• Outbuildings and other buildings, if they are included in the policy
• Certain service pipes, if the cover includes them

Check which buildings are listed on the policy. An annexe, a garage or an older outbuilding is not something you should assume is included just because it stands on the plot.

Fire insurance and home loans

It is often written that buildings insurance is required by law. That is too imprecise.

Forsikringsoplysningen (the Danish insurance information service) states that all mortgaged houses must have fire insurance. The lender requires the fire cover because the house serves as security for the loan.^[1]

The other covers on the house are voluntary as a starting point. That does not mean they are unimportant. It means you need to distinguish between:

1. What the lender requires
2. What the policy offers
3. The risks you choose to bear yourself

The bank or the mortgage credit institution (realkreditinstitut) may ask for documentation of the fire insurance before the loan is paid out. The requirements are set out in the financing and the loan terms.

Contents insurance

Contents insurance is not only about furniture.

It covers the household's belongings according to the policy terms and normally also includes private liability and legal expenses cover.^[2]

Contents can include, among other things:

• Furniture
• Clothes
• Electronics
• Bicycles
• Kitchen equipment
• Tools
• Other personal belongings

Private liability

The liability cover can help if you become liable to pay compensation for damage to another person or to other people's property. That is not the same as every piece of damage you cause being covered. Liability has to be assessed according to the rules and the policy terms.

Legal expenses

Under certain conditions, the legal expenses cover can contribute to the costs of private legal disputes. It has its own cover limits, excess and exclusions.

Sum insured and valuable items

Some policies have an overall sum insured. Others are marketed as having no sum limit but can still have limits for certain items.

Pay particular attention to:

• Jewellery and watches
• Art and collections
• Expensive bicycles
• Electronics
• Tools
• Things in the basement, shed and garage

Read more about contents insurance add-ons and excess.

Insurance for an owner-occupied flat

With an owner-occupied flat, the owners' association normally insures the property itself. But “the property is insured” does not tell you who covers a specific piece of damage inside your flat.

Forsikringsoplysningen points out that you should look into both the association's insurance and its articles of association. Certain parts of the building may be your own responsibility.^[3]

Ask for or find:

• The owners' association's insurance policy
• Insurance terms and conditions
• Articles of association
• Information about the excess
• Rules on pipes, floors, glass and sanitary fittings
• Rules on improvements to the flat

Then ask:

• Does the association cover fixed installations inside the flat?
• Who pays the excess if damage comes from your flat?
• Are glass and sanitary ware included?
• Are balconies, basement storage rooms and other utility rooms included?
• What happens to improvements you have paid for yourself?

You still need your own contents insurance if your belongings and your private liability are to be covered under a contents policy.

Change-of-ownership insurance

Change-of-ownership insurance should not be confused with buildings insurance.

Depending on its terms, change-of-ownership insurance can cover certain hidden damage or defects that existed before the handover and that the buyer did not know about. The cover is linked to the Danish home inspection scheme (huseftersynsordningen) and the specific offer.^[4]

Buildings insurance, by contrast, looks at damage that is covered during the insurance period.

Example

A hidden defect in a structure may belong under the change-of-ownership insurance if the conditions are met.

New storm damage after the handover may belong under the buildings insurance if the policy covers it.

Which policy should handle the claim depends on the cause, the timing and the terms.

Read the separate guide on change-of-ownership insurance and cover.

When should the insurance policies start?

The start date should not be chosen based on when the removal van arrives.

It must match the purchase agreement and the point at which the risk or the right of disposal passes to you.

That can be:

• The ordinary handover day
• An earlier access date (dispositionsdag)
• Another date that follows from the agreement

Get the date confirmed in the policy and check that the bank, your legal adviser and the insurance company are all working with the same date.

Right of disposal before the handover

If you get the keys before the handover day, your need for insurance can start earlier.

Among other things, the early access agreement should describe:

• What you may use the home for
• Whether you may paint or renovate
• Who pays for utilities
• Who bears the risk
• Which insurance policies must be active

Having a key in your hand is not in itself an insurance date. It is the agreement and the policy that decide it.

Read more about the right of disposal and getting the keys early.

Does the insurance cover you during the move?

It depends on the terms.

There can be several possible parties:

• Your contents insurance
• The removal company's liability insurance
• The company renting out the removal van
• The person who caused the damage

Cover and liability can depend on whether you move yourself, use friends or buy a professional removal service.

Before moving day, you can clarify:

• Whether contents are covered during transport
• Whether contents are covered at both addresses for a transitional period
• How theft from a removal van is handled
• Who reports any damage
• What the removal company's maximum liability is
• What documentation is required

Write the answers into your moving plan, so the insurance does not end up as something you first discuss on the pavement next to a broken bookcase.

Insurance during renovation

Ordinary home or buildings insurance does not necessarily cover all damage during major building work.

For extensive projects, contractor's all-risks insurance (entrepriseforsikring) may be relevant. Forsikringsoplysningen highlights, among other things, projects involving work on load-bearing structures as an area where special covers may be needed.^[5]

Clarify before the work begins:

• Whether the insurance company needs to be informed
• Whether the home may stand unoccupied during the work
• Whether the ordinary buildings insurance continues unchanged
• Whether the contractor has liability insurance
• Whether contractor's all-risks insurance should be taken out
• Who covers materials on the building site

Also read the guide on renovating before you move in.

How to compare insurance policies

Two policies can both be called buildings insurance and still be different.

Compare using the same address, the same start date and the same desired covers.

Then look at:

The cheapest policy can be the right one for one household and the wrong one for another. The price only makes sense once you know what you get for it.

You can read more about the price of buildings insurance and the price of contents insurance in your new home.

Excess, depreciation and exclusions

Excess

The excess (selvrisiko) is the part of a covered claim that you pay yourself. There can be different excesses on the same policy.

Depreciation

Some parts of a building and some items are replaced with a deduction for age or wear. Forsikringsoplysningen describes, for example, that certain parts of a building can follow fixed depreciation tables.^[5]

Exclusions

As a starting point, insurance does not cover ordinary wear and tear, lack of maintenance or all damage that develops gradually. The exact boundaries are set out in the terms.

It is therefore not enough to read the summary on the front page of the quote. The specific exclusions may be further down.

Timeline before the handover

Once the purchase is approved

• Find the date on which the risk passes and any right of disposal
• Clarify the lender's requirements for fire insurance
• Find the owners' association's policy if you are buying a flat
• Gather information on buildings, roof, heating and previous damage

A few weeks before

• Get quotes based on the same information and start date
• Compare cover, exclusions and excess
• Clarify contents cover at the old and new address during the move
• Look into any special needs for renovation

Before access or handover

• Check that the policies have been accepted
• Check the correct start date
• Send the necessary documentation to the bank or mortgage credit institution
• Keep the policy, quotes and terms

On the handover day

• Document the condition of the home
• Keep photos and meter readings
• Report any damage promptly, following the policy's procedure

Example: buying a house

A family buys a mortgaged house and gets the right of disposal seven days before the handover so they can paint.

Among other things, they need to clarify:

1. Which date the fire and buildings insurance should start
2. Whether the early access agreement requires special insurance
3. Whether contents, tools and materials are covered in the house before they move in
4. Whether the planned work requires extra cover
5. What documentation the lender needs to receive

So the start date can fall before the day the removal van arrives.

Example: buying an owner-occupied flat

A buyer takes over an owner-occupied flat. The owners' association has buildings insurance.

The buyer still needs to look into:

1. What the association's policy covers inside the flat
2. Who pays the excess if there is damage
3. Whether improvements and fixed installations are included
4. When the personal contents insurance should be moved
5. Whether renovation must be approved and the insurer informed

“The property is insured” is therefore the start of the question. Not the whole answer.

Common misunderstandings

Buildings insurance is required by law

Not in general. For a mortgaged house, the lender normally requires fire insurance as security for the loan.

Buildings insurance covers my furniture

No. Your personal belongings normally fall under the contents insurance.

Contents insurance covers the house

No. Contents insurance does not cover the house itself the way buildings insurance does.

The owners' association covers everything in the flat

Not necessarily. The policy and the articles of association can place certain parts of the building or certain costs on the owner.

Change-of-ownership insurance and buildings insurance are the same thing

No. They deal with different types of damage and different points in time.

The insurance should start on the day I move in

Not necessarily. The start date must match the transfer of risk and any right of disposal.

The removal company automatically pays for any damage

No. Liability, limitations and documentation requirements follow the agreement and the rules.

Checklist before the handover

• Find the risk and access dates in the agreement
• Clarify the lender's requirements for fire insurance
• Find the owners' association's policy and articles of association if buying a flat
• Get comparable quotes
• Check the buildings and installations in the policy
• Read the exclusions and depreciation rules
• Compare the excesses
• Clarify contents cover during the move
• Clarify insurance for any planned renovation
• Confirm the start date in writing
• Send the necessary documentation to the lender
• Keep the policy and terms together with the purchase documents

In summary

Insurance when buying a home comes down to three things:

1. What needs to be insured
2. Which types of damage the policy includes
3. When the cover should begin

With a house, you need to distinguish between the lender's fire insurance requirement and the other building covers. With an owner-occupied flat, you need to check the association's insurance instead of assuming everything is covered. And for both types of home, the contents insurance is your own.

Use the guide on the price of buildings insurance or the guide on the price of contents insurance as your next step once you know the type of home and the start date.

BoligKlar gives you a second pair of eyes and an overview. The insurance company assesses the specific cover according to the policy.

Frequently asked questions