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A premium indication, not personal advice. Prefer to talk it through? Call 072 - 509 24 56.
In brief
Buildings insurance for property investors covers your buildings on rebuild value and allows several properties to be brought under one policy, each with its own sum insured and risk profile. That is the essential difference from a private home policy: you are not insuring a home you live in, but a business in which the building is the means of production.
The section most underestimated here is loss of rent. If a building burns out, the rent stops while interest, repayments, VvE (Dutch owners' association) contributions and local charges continue. Loss of rent cover pays the rent lost for a period stated on the policy schedule, from the moment of the loss until the property can be let again. Non-payment by a tenant is expressly outside it; that is a credit risk, not an insured event.
Not covered are deferred maintenance, subsidence and foundation defects, and the additional cost of asbestos removal in so far as it goes beyond repairing the damage itself. Your tenant's contents and fit-out are not yours either; those belong on tenant's improvements cover with the tenant themselves.
What does buildings insurance for property investors cover?
The structure of the cover in three parts, with an overview per situation below.
The standard
Extended
Fire, storm, water, burglary and collision.
Fire and lightning strike
Storm from force 7 upwards
Water damage and leakage
Burglary damage
Wider
Comprehensive
Also sudden damage from outside that is not excluded.
A small mishap while doing DIY
Unnamed causes
Less discussion
The essentials
Basis of value
Rebuild value with a guarantee against underinsurance.
Rebuild value calculator
Valuation of unusual properties
Guarantee on your policy schedule
What is covered
Situation
Extended
Comprehensive
Fire and lightning damage
Yes
Yes
Storm damage from force 7 upwards
Yes
Yes
Water damage from a burst pipe
Yes
Yes
Burglary damage to doors and frames
Yes
Yes
Drilling through a pipe while doing DIY
No
Yes
Subsidence and deferred maintenance
No
No
This overview is general in nature and is not personal advice. What is actually covered, including exclusions, limits and the excess, is set out in the policy conditions and the insurance card (verzekeringskaart) of the insurer; you receive both before you take out cover. Taking out cover without advice? Then read what execution only means for you.
Where things go wrong in practice
Four points that make the difference between a policy that pays out and one that does not.
Loss of rent is a section with a period, not an automatic entitlement
The policy schedule states how many months of lost rent are paid. That period must match the realistic repair time for your most demanding property, including the permit process and demolition. For a listed building or a property in a city centre that is considerably longer than for a readily lettable business unit. Check as well whether the section also applies to a loss where the property remains technically usable but is in fact unlettable, for example after soot or water damage.
Keep the use of each property up to date
A unit that moves from storage to production, or an office floor that becomes a restaurant, changes the fire risk materially. An unreported change of use is an increase in the risk and gives the insurer grounds to adjust payment or end the cover. In a portfolio this shifts unnoticed as tenants change. So check each year, property by property, what is actually going on, and provide in the lease that changes in use must be reported.
As owner you are liable for the structure itself
Under 6:174 DCC you are liable as possessor for damage caused by a defective structure: a loose roof tile, a balcony that gives way, a slippery stairway in the entrance. That is liability towards third parties and does not fall under the fire or buildings policy. For that you need property owners' liability cover. Soil contamination from a leaking tank requires separate environmental damage cover again.
With a portfolio, underinsurance is measured property by property
The proportionality rule is applied to each insured property, not across the whole. One building with too low a sum insured therefore remains a problem, even if the others are amply insured. If you complete a rebuild value calculator correctly for each property or have it valued, you usually get a guarantee against underinsurance and the actual loss is paid. If that guarantee is not on your policy schedule, every claim is paid proportionately, including small events.
A guarantee against underinsurance is stated on your policy schedule
If you fill in the rebuild value calculator correctly, you will usually receive a guarantee against underinsurance: in the event of a claim the actual amount is paid, even if the sum insured turns out to be too low. If that guarantee is not stated on your policy schedule, the proportionality rule applies and, in the event of every claims are paid proportionately.
Customers rate our service on four aspects: personal service, service delivery, availability and the outcome. The reviews are collected and published by NH1816 and come from customers who have actually taken out a policy with Finass Advies B.V. or reported a claim.
What happens to the cover when a property stands empty between tenants?
On many policies, cover is restricted to fire, storm and lightning after a certain period of vacancy. Water damage, burglary and vandalism drop out precisely during the period when nobody is keeping an eye on the place. For a portfolio with changing occupancy, a vacancy arrangement in the policy is more practical than reporting property by property, because then nothing falls between two stools.
Is loss of rent covered as standard?
Not always. On some policies it is a separate section that you actively choose, on others a limited period is included as standard. Check on your policy schedule whether the section is there and over how many months it runs. It pays the rent lost after a covered loss, not the rent you miss because a tenant fails to pay or leaves.
Who insures my tenant's contents and fit-out?
The tenant themselves. Your buildings insurance covers the structure: walls, roof, floors and anything fixed to the building. Alterations the tenant has had carried out at their own expense fall under their tenant's improvements. Record in the lease who insures what, or a dispute will arise after a fire about who pays for the shop fit-out.
Does this policy cover my liability as owner?
No. Buildings insurance pays for damage to your own properties. If a passer-by is injured because of a defect in the building, that is liability under Article 6:174 of the Dutch Civil Code and you need property owners' liability insurance. The two covers are separate products and are rarely taken out together automatically.
Finass Verzekert is a trading name of Finass Advies B.V. We advise on and arrange non-life insurance on the basis of an objective analysis of several insurers, and receive commission for this from the insurer, which is included in the premium. You pay no separate advice fee. Before you take out cover, we establish your wishes and needs.
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