Is buildings insurance (opstalverzekering) compulsory?
Nowhere does the law require a homeowner to insure their property. The requirement comes from your mortgage deed, your deed of division or your ground lease conditions.
The calculator and the quote form below are in Dutch. Prefer to do this in English? Email info@finassverzekert. nl or call 072 - 509 24 56 and we will take it from there.
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In brief
The Netherlands has only a handful of compulsory non-life insurances. For motor vehicles that duty is set out in Article 2 of the Dutch Motor Insurance Liability Act (WAM), with a fine and suspension of the registration if you do not comply. For buildings there is no such thing. You may leave your home entirely uninsured. The legislator leaves that to you, because with an uninsured home you in principle only harm yourself.
In practice you can rarely avoid it. Virtually every mortgage deed contains the obligation to keep the security insured, with the lender as an interested party on the policy. If you cancel the insurance, the bank is notified and may take out a policy itself and charge the premium to you. With a flat, the duty also rests on the association under Article 5:112 of the Dutch Civil Code.
Compulsory or not: uninsured, you carry the full rebuilding risk yourself. A home that burns down means the property is gone while the mortgage debt remains. You can work out what you would then have to find under calculating the rebuild value.
The structure of the cover in three parts, with an overview per situation below.
The basis
Rebuild value
What it costs to rebuild the premises.
Not the market value
Not the WOZ value (the Dutch property valuation)
Guarantee against underinsurance
Permanently fixed
What is included
Everything permanently attached to the building.
Building and installations
Outbuildings
Boundary fences
Optional
Extensions
What is excluded as standard.
Glass
Garden landscaping
Inherent defect and foundations
What is covered
Situation
Standard
With extension
Fire, smoke and lightning strike
Yes
Yes
Storm from force 7 upwards
Yes
Yes
Water damage from a burst pipe
Yes
Yes
Glass breakage
Sometimes
Yes
Groundwater coming through the floor
No
No
Wear 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.
No statutory obligation, but a contractual one
Compare it with your car: there, Article 2 of the Dutch Motor Insurance Liability Act (WAM) forces you to insure because you can cause damage to others. A house that burns down affects you first of all. That is why the legislator left this free. The requirement you come across is therefore always an agreement: with your bank, with your owners' association or with the local authority as ground lessor. Read that agreement, not the law.
The mortgage deed and the interested party
The lender has itself noted on your policy as an interested party. That has two consequences. The insurer informs the bank when the policy is ended or the premium is not paid, and on a large claim the payment is made jointly to the bank, so that it does not disappear into repairs to the security without its consent. Repairing is allowed; having the payment made to you alone usually is not.
With a flat the duty lies with the association
For an owners' association, under Article 5:112 of the Dutch Civil Code there is a genuine duty to insure the building. That rests on the association, not on you personally. As a flat owner you therefore do not take out your own buildings policy, but you do take out contents, owner's interest and liability cover. How that division works is set out in insuring a flat with a VvE.
If you rent, you do not insure the structure
The owner of the property insures the structure. You do not. What you have installed yourself, a kitchen, a parquet floor, a sun blind, is tenant's interest and you insure it on your contents policy. Liability for damage you cause to the rented property also remains yours. See buildings insurance for a rented home for that division.
What does your premium depend on?
Rebuild value. The sum insured is the basis. The lender usually requires it to be set on the rebuild value and not on the market value.
Required form of cover. Mortgage conditions prescribe fire as a minimum. If you choose wider cover you pay more but comfortably meet the requirement.
Construction type and roof covering. Brick with tiles is rated differently from timber construction or thatch, regardless of who requires the insurance.
Year of construction and state of maintenance. For older properties, the state of the wiring, roof and pipework counts towards acceptance and the rate.
Use of the premises. Owner occupation, letting or lengthy vacancy lead to different rates and sometimes to more limited perils cover.
Guarantee against underinsurance. If you complete the rebuild value calculator correctly, the insurer gives that guarantee. That is a condition the bank often values.
Insurers weigh these details differently. That is where your saving is.
How we arrange it
You request a quoteWe take stock of your situation, your risk and your wishes.
We compareseveral insurers, on premium as well as conditions.
You receive a proposalWith an explanation of the differences and the exclusions.
We arrange the switchIncluding cancellation, so there is no gap in cover.
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.
Yes, under the mortgage conditions you signed. If the security turns out to be uninsured, the lender may take out a policy itself and recover the premium from you. That policy is usually more expensive than what you would arrange yourself and is tailored solely to its interest, so to the mortgage debt and not to your enjoyment of the home.
I have paid off my mortgage. May I cancel now?
Legally, yes: without a mortgage the contractual duty lapses and the law imposes nothing on you. In reality you then carry the full rebuilding risk yourself, while you no longer have a loan to fall back on. For most households a mortgage-free home is precisely the largest asset they own.
With a flat, do I have to take out a buildings policy myself?
No. Under Article 5:112 of the Dutch Civil Code the association is required to insure the building and does so for all owners together. The premium is included in your monthly contribution. What you arrange yourself is your contents, your own improvements and your liability. A second buildings policy only creates an overlap.
What happens if an uninsured property burns down?
Your mortgage debt continues to exist while the security is gone, and you bear the rebuilding costs yourself. The costs of demolition and clearance are also for your account and the local authority can serve notice on you to leave the site safe. Your lender can also call in the loan for breach of the mortgage conditions.
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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