Homeowners and builders in Germany are facing a major challenge: classic oil and gas heating is on the brink of extinction, and the use of heat pumps and solar systems is increasing. But how do you insure the expensive systems? An overview.
What sums are involved?
New systems for generating heat and electricity are expensive. While a conventional oil or gas heating system costs between EUR 8,000 and EUR 12,000 when new, a heat pump costs between EUR 18,000 and EUR 34,000 – as much as a small mid-range car. An uninsured loss of this investment can use up the savings or cause a construction project to collapse. A solar system on the roof can easily cost 15,000 euros.
Is the heat pump automatically covered by building insurance?
In principle, objects permanently connected to the building are also insured under the residential building insurance. But there are exceptions. The new system is insured as standard against fire, lightning, explosion, implosion and even against the impact of an aircraft, as well as against damage caused by mains water, burst pipes, frost damage as well as storm and hail.
Where are the gaps?
However, so-called elementary damage resulting from natural or extreme weather events is not covered. These include the insurers flood, backwater, subsidence, landslide, earthquake, snow pressure, avalanches and volcanic eruptions. Now volcanic eruptions are rather rare in most regions of Germany, but the backwater after heavy rain, which fills up the basement, can happen almost anywhere. “These dangers are not included in the insurance as standard, which is why the customer has to extend the insurance cover to take out elementary damage insurance,” says Fabian Hintzler from the provincial group.
Joachim Dorau from Bergisch-Gladbach had a photovoltaic system installed to generate electricity and a heat pump for geothermal heat. His facilities are insured against standard perils through his homeowners insurance. In order to also insure them against natural hazards, he had to explicitly include them in the policy. A note to the insurer was sufficient. His insurer associates special upper limits for claims payments and different deductibles with risks that go beyond the standard dangers. Dorau has to pay 500 euros per claim after natural disasters.
“After buying a new heating system, be sure to contact your insurer,” recommends Elke Weidenbach from the North Rhine-Westphalia consumer advice center. “Have a written record of the risks your new system is protected against with the same insurance cover,” she says. “Also let us inform you about additional insurable risks.” Special features of the installation would also have to be clarified with the insurer. This applies, for example, if the solar system is in the front yard and not on the roof.
New heating systems increase the value of the building. Does the premium also increase automatically?
The sum insured of the building can be calculated according to the square footage of a house or its total value. “Because a heating system does not increase the living space, the exchange, even with a more expensive system, is included in most home building insurance policies without a surcharge,” says Guido Staubesand from SV Sparkassenversicherung in Stuttgart. However, if the insurance premium is calculated based on the value of the building, it will be more expensive. “Then the contribution increases in proportion to the increase in value of the object.”
From what point in time is the new system insured?
As a rule, specialist companies install a heat pump or a solar system. They must have public liability insurance for damage they cause in their work. The homeowner is already protected by his policy during installation. “During the installation of the heating system that is not yet ready for operation, residential building insurance provides protection against standard risks and natural hazards, if included,” explains Staubesand.
However, in practice there are insurance gaps, for example if a roof is damaged during the installation of a solar system, but the construction company denies the damage. It is therefore advisable to document the condition of the roof with photos before starting work.
What happens if someone steals the heat pump from the front yard or a wild animal bites the solar system?
Theft of a system from the front yard must be covered by separate electronics insurance. With solar systems, a distinction is made between solar thermal systems, which convert solar energy into usable thermal energy (heat) for the household, and photovoltaic systems, which convert solar energy into electricity.
Electricity can also be generated on the balcony. But is the system also protected by household contents insurance and reported to private liability insurance? She should.
(Photo: Robert Poorten/Imago)
Solar thermal systems are also insured with the savings bank insurance and many other companies through the residential building insurance. Photovoltaic systems, on the other hand, must be secured separately with photovoltaic insurance. It also covers damage caused by design defects or the material, as well as theft or short circuits. The insurance protection also applies in the event of incorrect operation and negligence and provides compensation for the loss of income if electricity is fed into the general power grid.
What does the tenant who produces electricity on the balcony do?
Anyone who operates a solar system as a tenant on the balcony must clarify whether it is covered by the existing household contents insurance. In addition, the system should be reported to private liability insurance, then it will usually be included at no additional cost.