How much does rental apartment insurance cost?
When you offer your apartment for rent, you expect a certain profit without incurring huge costs or risks. Even the best-drafted agreement cannot guarantee that your guests won't flood your neighbor's apartment or start a fire. It is therefore worth protecting yourself financially against such events with a dedicated insurance policy. Today we will focus on apartment insurance and present the estimated cost of such coverage.
Insurance for a rented apartment
Renting out a vacant apartment is one of the most popular ideas for generating extra income. However, things won't always go smoothly, and unforeseen events can affect you too. A burst pipe, a flood, a windstorm or a fire can leave you without your property, and will certainly mean unplanned repairs and costs. That is why insurance companies can take on this risk, provided you buy an appropriate policy. Apartment insurance is a popular, though not mandatory, form of protection for your property. There is one exception, however – if you take out a mortgage on the apartment, the bank requires such insurance. And it has a point – a premium of a few hundred zlotys lets you protect a property worth many times more. Is PLN 250-300 a year an excessive price for a guarantee that helps you avoid costly repairs in the event of unforeseen events? Definitely not, especially when you realize how much contractors' rates have gone up and how expensive finishing materials are today. That is why it is worth thinking of apartment insurance not as an expense but as an investment in your own peace of mind, comfort and security.
What events should you insure your apartment against?
The essence of an insurance policy is protection against events and the risk of such a situation occurring. The greater, more frequent and more costly the risk, the higher the final premium. A policy may also cover exceptionally rare, even improbable events, e.g. an aircraft crash or a sonic boom. Although it is unlikely, there is no guarantee that such a situation won't affect you. That is why, when insuring your apartment, it is worth choosing the broadest coverage package available on the market. If for some reason you don't want the broadest possible policy, you can opt for popular basic coverage options. The absolute minimum is protection against fire, flood, lightning strike, power surge and water damage. It is also a very good idea to include protection against strong wind, heavy rain and snowfall, hail and explosion. If you are renting out a house, it is also worth considering protection against snow load, falling trees and masts, and impact by a motor vehicle.
Insurance package add-ons – better safe than sorry
In addition to protection against events, insurance policies offer so-called add-ons, i.e. additional services related to the property. Although at first they may seem like a drain on your budget, in many everyday situations they will prove indispensable. The add-ons worth including in your insurance contract are briefly described below:
- Home assistance – also known as home emergency cover, it provides help from professionals in the event of breakdowns and faults, e.g. an electrician, plumber or locksmith, up to a set limit for labor and spare parts, most often PLN 5,000;
- Burglary insurance – financial protection if a theft occurs while the apartment is properly secured (windows and balcony doors closed, front door locked);
- Legal assistance – access to legal consultations and advice in the event of a dispute with tenants, also helpful when drafting a lease agreement, house rules or other important documents;
- Glass breakage – an add-on covering all appliances and elements containing glass: from windows and shower doors to induction hobs and photovoltaic panels;
- Vandalism protection – protection against acts of hooliganism, such as damage to the facade, destruction of the front door or a broken window; the add-on does not cover tenants or persons renting the unit.
How much does insurance for a rented apartment cost?
It will come as no surprise if we answer this question with “it depends”. You may come across basic policies costing between PLN 220 and 250. You may also find comprehensive packages with add-ons, where staying under a PLN 500 budget will be impossible. Besides the scope of coverage, the price is affected by many factors, such as the exact location of the property, year of construction, floor area and type of use. The geographic location makes it possible to estimate the flood risk and exposure to extreme weather. The position within the building, in turn, helps determine the risk of faults that can lead to a power surge, water damage or fire. Based on a calculation for a ground-floor, two-room, 45 m2 apartment of standard finish in a three-year-old apartment block in Wrocław-Krzyki, we can estimate the cost of a policy at PLN 300 for the basic option and PLN 350 to 690 for the option with add-ons.
