Home insurance: what amount do I insure for, what is the “average clause”, and does the bank’s insurance cover my belongings?

Buildings insurance covers the home itself: walls, roof, permanent parts. Contents insurance covers your belongings: furniture, appliances, clothes. They are two different amounts, and contents that were not declared are not paid.

For the rebuild cost. The purchase price and market value include the land and the market, which do not burn. If you insure for less than the rebuild cost, a loss may be paid in proportion.

It is the clause that reduces the payment when the sum insured is lower than the real value. The Insurance Association gave the example: a €200,000 house insured for €100,000 is paid at 50%. Ask the insurer for the calculation in writing.

Work out what it would cost to rebuild the home today, including engineers’ fees and debris removal, without the land. An engineer or valuer can give you a figure; the tool Is my home underinsured? gives a first picture.

Very possibly. After the 2025 wildfire it emerged that many policies had not been updated in 20 years, while building costs rose. Ask the insurer for the current figure in writing and compare it with the rebuild cost.

Usually not. The insurance the bank requires usually concerns the building, to protect the loan. Your furniture and belongings need contents cover; check what your own policy says.

If the loan amount is lower than the rebuild cost, underinsurance may apply and the payment may be reduced in proportion. The bank protects the loan; the rest of the value is yours to insure. Check the figure today.

Often yes. Many policies set a limit per item and ask for valuable items to be listed separately, with receipts or valuations. Contents that were not declared are not paid, so ask in writing what the limit is.

With “new for old” you are paid the cost of replacing with an equivalent new item; with “indemnity” wear and tear for age is deducted. Many policies have exceptions, for example for clothes or electronics. Check which basis your own policy uses.

In many policies, anything permanently fixed to the building counts as the building, but some set limits or exclusions for solar panels and solar water heaters. Check the definition of “building” and, if needed, declare them at their value.

It depends on the definition of the building in your own policy. Many include garden walls, pools and fences, often with limits or exclusions for some risks. Ask for written confirmation and count them in the figure.

Often yes: many insurers insure on the basis of your interest in the property, such as a sale contract or a mortgage. Ask which documents they want and state the situation honestly; keep the answer in writing.

Many policies limit cover during major works or while the home is empty, or require the insurer to be told. Tell it in writing before you start and ask whether the contractor has his own liability insurance.

Yes. An extension or an expensive kitchen raises the rebuild cost, and without telling the insurer the home can become underinsured. Send written notice and ask for a new figure.

Each policy has its own. In Cyprus the Insurance Association mentioned contents that were not declared and conditions such as a fenced or cleared plot. Many policies also exclude gradual wear and poor maintenance. Check whether earthquake is included and with what excess.

Accidental damage is often not in the basic cover and is added as an extension. Check whether your own policy has it, for the building, contents or both.

Many policies have a small cover for freezer food, often with a limit and with exclusions for planned power cuts. Check whether yours has it before you claim.

Some policies cover damage from a power surge or short circuit, others only as an extension, and many exclude the appliance’s wear. Check the terms and keep the technician’s written report.

Yes. Under Law 41(I)/2017, Article 12(4), the bank must accept a policy from another insurer when the level of cover matches what it proposed. Ask the bank in writing which cover it requires, and make sure the new policy starts before the old one ends.

Many insurers insure prefab homes, often with different terms for materials and foundations. Declare exactly how it is built and ask in writing what applies.

Many policies require business use to be declared, especially if clients visit or you keep stock, and work equipment is often not included in contents. Tell the insurer in writing so you are not left uncovered.

Only if the policy has cover away from home (often “all risks” for personal items), usually with a limit and conditions, for example a locked bike. Check whether yours has it.

The average clause usually reduces the payment in proportion, not to zero. Ask in writing for the policy clause and the calculation. If you disagree, a written complaint to the company (reply within 45 days) and then the Financial Ombudsman.