KNOWLEDGE BASE · INSURANCE
Insurance for a VvE: building, liability and directors
A fire, a leak or a falling roof tile: in an apartment building, damage often affects several owners at once. That is why the VvE (owners’ association, Vereniging van Eigenaars) arranges part of the insurance jointly. But what exactly is covered, and what is not?
Building insurance
Building insurance (opstalverzekering) covers damage to the building itself, for example from fire, storm or a burst pipe. In an apartment building, the association usually takes out this insurance for the whole building, including the apartments. The law says that the regulations in the deed of division (splitsingsreglement) must set out who arranges this insurance and which risks the building is insured against.
If the association receives money from the insurer after damage, the party that must insure the building under the regulations manages that money. If it has been decided to repair the damage, the money goes to that repair.
Source: Article 5:112(1)(d) and Article 5:136 of the Dutch Civil Code (Burgerlijk Wetboek, BW). See wetten.overheid.nl (in Dutch).
Watch the rebuild value
The sum insured is usually based on the rebuild value: what it would cost to rebuild the building. If that value is too low, the insurer may pay out less after damage. This is called underinsurance. So have the rebuild value reassessed regularly, for example with a valuation, and ask the insurer what it requires. You also need the rebuild value for the minimum amount the association must put into the reserve fund.
What the owner arranges
The association insures the building as it was delivered. If an owner has installed a new kitchen, bathroom or floor, that added value is not always covered by the association’s policy. Some insurers offer a separate owner’s insurance for this. Contents, such as furniture and clothes, are each resident’s own responsibility, through home contents insurance. A tenant insures their own contents.
Liability of the association
The association can be liable if someone suffers damage because of a shared part of the building. Think of a visitor who trips over a loose tile in the hall, or a roof tile that falls on a car. For this kind of damage there is liability insurance for owners’ associations. Sometimes this cover is already part of a package with the building policy, sometimes it is a separate policy. Ask, because it differs per insurer.
Directors’ liability
A board member must carry out their duties properly. In the case of serious mistakes, the association can hold a board member liable. That risk is small if you work carefully, but it sometimes puts people off joining the board. Directors’ liability insurance in the association’s name can help. Discuss at the general meeting (ALV, algemene ledenvergadering) whether the association wants to take it out.
Source: Article 5:124(2) and Article 2:9 of the Dutch Civil Code. See wetten.overheid.nl and wetten.overheid.nl (in Dutch).
An annual check
- Is the rebuild value still up to date?
- Does the list of insured risks match what the regulations require?
- How high is the excess, and who pays it when the damage is inside an apartment?
- Does every owner know where the policy is kept and who to call after damage?
- Has anything new been added, such as solar panels or charging points, that you need to report?
Compare the premium and the conditions with other providers from time to time. An insurance broker can help with this. Do not choose on price alone, but also look at the cover and the excess.
Arrange this in Ledenhuis
In Ledenhuis you add the building insurance policy to the documents, so every owner can find it. Residents report damage and see who is dealing with it. The first year is free, with no payment details needed.