Have you decided to get apartment insurance? It's crucial to know the different options to match the coverage that suits you best. Here's everything you need to know.
There's no denying that for most Israelis, an apartment is the most valuable asset they'll acquire in their lifetime. Besides the economic aspect, an apartment is also a home, our safest environment. Therefore, there's great importance in securing it in a way that provides suitable protection and ensures optimal defense according to each individual's needs. Apartment insurance typically includes two separate policies that can also be sold together: building insurance and content insurance. It's essential to explore the various options before purchasing the right insurance for you.
Apartment Insurance - General and Principled Explanation
Why do you even need apartment insurance? Because your most valuable asset can be damaged for various reasons, such as earthquakes, fire, water damage from external sources, damage caused by bursting, leaks, and other insurance events that can cause significant damage to the apartment or house. Generally, apartment insurance distinguishes between the structure of the apartment and its contents. Accordingly, the structure of the apartment, i.e., the walls, floors, infrastructure systems, and the like, are insured separately from the contents of the apartment, which refers to furniture, electrical appliances, movable equipment, and the like.
Building Insurance and Content Insurance - Features and Differences
The purpose of insurance is to restore the property to its pre-incident state. Under building insurance, most policies cover or finance the repair of the apartment. Building coverage also includes expenses related to the reconstruction of the apartment, such as expenses for surveying and architecture services, rent expenses for alternative housing when the property is uninhabitable, and it also includes the relative construction cost of the property owner in common areas (stairwell, elevator, etc.) in case the entire building is damaged. It's important to note that if the property is mortgaged to a bank, the bank usually requires the property owners to insure it with building insurance.
Content insurance is intended to cover damages caused to property inside the apartment. It's important to note that valuable items such as jewelry, artworks, and more can be insured under a dedicated content insurance framework. When purchasing insurance, it is necessary to declare the value of the items within the content and sometimes a surveyor appointed by the insurance company will come to assess the value of the items and the value of the content.
Key Extensions to Building and Content Insurance
Over the years, apartment insurance has been adapted to the changing and evolving needs of the insured, and today, there are several extensions that can be purchased as part of building and content insurance. The most common extension in building insurance is extension C coverage, which covers damages to property and third-party bodily injury due to the insured's negligence. This extension is included in the content insurance framework as well and can also be purchased as an addition to building insurance.
Today, additional extensions can also include coverage for damages in the event of a cyber event that may cause damage to electrical devices and home computer networks, coverage for replacement of apartment keys in case of loss or theft of keys when finding yourself locked out of the apartment, and other additional extensions.
Bottom Line - Match Your Insurance to Your Needs
Apartment insurance (building and content) includes coverage for the structure of the property and coverage for its contents. Each insurance can be purchased separately or combined, ensuring peace of mind and full protection in the event of damage to your property. The flexibility in choosing extensions that characterizes apartment insurance emphasizes the need to understand all the options and the insured's needs so that they can tailor the various coverages to provide them with appropriate protection.
The information is presented in a general manner only, and the formula that obligates AIG Israel Insurance Company Ltd. is the formula appearing in the policy and/or coverage letters and/or service extensions and attachments attached to the policy. Some coverage and/or service letters are subject to additional costs and/or self-participation payments. Certain services are limited to the hours of operation specified in the policy and/or service letters.
Yaron Hollander, Regulation and Product Development Manager at AIG, in collaboration with AIG