Residential building insurance is designed to protect the home and yard. Those who use them too often run the risk of being kicked out, because insurance companies often take the opportunity to terminate precisely these customers.

Who should pay for that?

PIn principle, residential building insurances are a good thing: They cover the dangers of fire, storm, hail, lightning strikes or tap water damage as standard and cost from 150 to 600 euros depending on the scope. But when there is really damage, a storm often brews between insurers and homeowners. The homeowners insurance regulates the damage, but often take the opportunity to terminate those customers who make claims. Especially if it wasn’t their first damage. Clever customers see to it that it doesn’t get that far.

Termination is an insurance company’s right, but it always causes trouble. Homeowners insurance is one of the most frequent disputes that the insurance ombudsman has to settle, with over 1,100 complaints annually. Even more common than automotive questions.

After all, it’s about your own home, which normally houses a large part of your assets. Nowadays, the residential building policy is no longer compulsory insurance (unlike motor vehicle liability insurance), but it is still indispensable for owners if they do not want to risk financial ruin. Especially if you have taken out a loan for home financing, because banks require insurance as a prerequisite for lending. If the insurer cancels the contract and the customer does not get a new one, the bank can in the worst case also cancel the loan. But it doesn’t have to go that far.

Around every tenth contract holder currently reports an incident to the insurance company every year. In years when the weather was particularly crazy, the insurance companies even paid out more benefits than they got in contributions. That is why they are always on the lookout for old contracts that no longer pay off because their terms are out of date and the contribution amounts are too low. After all, many insurance companies have been running for 20 years or more.

A lot of processing work due to minor damage

Above all, however, the companies take a closer look at those customers who have already reported multiple claims in the past five or ten years. Even if it is only trivial such as two small damages for around 300 euros for a few fallen roof tiles or a hailed roof window, customers already report termination. Because the companies say: Even minor damage causes a lot of processing effort and high costs. Houses where storms or water often leave their marks may be in a danger zone or have gotten old, which is why problems will arise more frequently. And customers who have already been successfully compensated could in future try to assert claims more often – instead of making other provisions or restructuring.

These are the reasons why insurers cancel the contract on their own initiative. Either with an ordinary termination at the end of the contract or with an extraordinary termination immediately after the claim settlement has been confirmed. Consumers should definitely try to prevent such dismissals. In principle, consumer associations advise: “Talk to your insurer or your broker if you have been given notice or believe that you are threatened with one!”

Some companies signal intermediaries in advance that they are about to be kicked out. Sometimes they get involved in what is known as a “reversal of termination”, that is to say that the customer terminates, which is generally the better alternative. Because once the contract has been terminated by the insurer, customers often find it difficult to get a new contract elsewhere.

They are then considered to be “negative risk”, as it is called in technical jargon, or they may even have received an entry in the HIS insurance database, with which the companies warn each other about problem customers. In addition, each customer must fill out in the next insurance application at the latest whether they have already been insured with a company – and who has canceled the contract.

Therefore: it is best to have one broker inquire about several insurers in parallel. Some companies take customers with multiple previous claims, others do not. Incidentally, most of the time, independent brokers recommend Interrisk, Konzept & Marketing, Domcura and VHV. You can also inquire at the federal government, which offers a group contract.

Some prefer to pay out of pocket

The current insurer can also be asked for a “contract renovation”. So it is said when contributions are increased or benefits are excluded or when a deductible is agreed. By the way, it is always better to pay for small damages out of your own pocket.

The companies often also increase the premiums for all customers and then give the insured person the freedom to accept the new conditions – or to terminate them themselves. But before you do that, because you are upset about the current insurer and its premium increases: better accept the conditions first! And then take your time looking for a new insurance policy with better prices. There is then a year for that. That is always better than ending up without a contract.