How to choose an appropriate sum insurance for your home?

A correctly chosen sum insured means less risk and fewer surprises in the event of a water leak, fire or other accidents. If the amount is too low, the insurance indemnity may prove insufficient. BTA home insurance allows you to insure both your home and your property or household belongings.

1) What is the sum insured?

Simply put, the sum insured is the limit up to which the insurer will indemnify for losses in accordance with the contract. BTA pays the insurance indemnity based on the sum insured specified in the contract (and the relevant limits for specific risks).

2) Select the amount separately: for the home and household belongings

For a more accurate result, consider 2 baskets:

• Home (real estate) – structural elements (walls, floors, etc.), furnishing, utilities (depending on the contract).
• Household belongings/property – furniture, household appliances, dishes, clothing, personal items, etc.

According to BTA, home insurance is designed to take care of both the real estate and the property or household belongings.

3) Home insurance amount: think "renovation costs"

The insurance amount for a home should be based on renovation/repair costs, not "market price." In practical terms, this means:

• For a private house – how much would it cost to build the same building with the same quality and parameters if it were significantly damaged, for example, after a fire?
• For an apartment – how much would it cost to completely renovate the interior, floors, plumbing, and electrical wiring after serious damage?

Important: market value should only be used if the market value is higher than the restoration costs. This ensures that in the event of a serious accident (such as an explosion or fire) where the apartment can no longer be restored, there will be sufficient funds to purchase an equivalent property.

4) Home contents insurance amount: quick inventory in 15 minutes

To avoid underestimating the value of your belongings, make a list and write down their approximate replacement value:

• Electronics (TV, laptops, phones)
• Household appliances (washing machine, kitchen appliances)
• Furniture (sofa, bed, wardrobes)
• Clothing/footwear
• Other (dishes, tools, children's items)

Add up the results – this will be a good basis for the sum insured for your household contents.

5) Pay attention to limits for specific risks

Important: policies and terms and conditions may have specific limits for certain types of losses (e.g., as a percentage of the sum insured). Therefore, it is worth checking what your most significant risks are and their limits.

6) Common mistakes to avoid

• You choose too low an amount for your home because you base it only on the purchase price, not the replacement cost. This is especially true if the home was purchased several years ago when real estate values were lower.
• You set a "minimum" for your household belongings without thinking about how much it would cost to completely restore your household after a serious accident.
• You don't read the IPID/Terms and Conditions, which set out the key coverage principles and limitations (the IPID is an insurance product information document - a short summary, but the full terms and conditions are in the contract/Terms and Conditions).

Short checklist (before confirming the amounts)

- Would the sum insured cover the renovation of your home after a major fire (structural elements, finishes, utilities)?

- Would the sum insured for household belongings allow you to replace all your major appliances, furniture and clothing at once?

- Do you know if there are any special limits/restrictions for any risks?

Frequently asked questions (FAQ)

Can I also insure my property/household belongings?

Yes — BTA home insurance also allows you to insure your belongings/household items (e.g., household appliances, etc.).

How can I tell if my sum insured is too low?

If, after a "quick inventory," you see that the value of your household contents is greater than the selected amount, then the amount should be increased. For your home — if the restoration costs (based on your experience/estimates) exceed the selected amount, this is a signal for adjustment.

Why should you also look at the limits?

Because insurance claim is paid in accordance with the contract and terms and conditions, and certain risks may have specific limits (e.g., limits for property located outside the address).

Would you like to understand what sum insured would be most appropriate for your home and belongings? Take a look at BTA's home insurance options and choose the coverage that suits your situation.