Owning a property gives you great freedom, but also involves some expenses, including tax and insurance. Taxes may be inevitable, but can you do without insurance? Perhaps in theory. But in reality it isn’t so simple.

Home insurance is required for a mortgage

If you buy a property with a mortgage, the banking organisation financing the purchase will insist that you take out home insurance. For the bank, the property serves as collateral for the loan. If you default on the payments, it has the right to sell your house or flat to recover its investment.

If the property goes up in smoke, the bank insists on a guarantee that it will be rebuilt. That’s why it makes sense to insist on insurance when taking out a mortgage.

Home insurance is not compulsory if you buy without a mortgage

If you invest your own money in property, there’s nothing to force you to insure your property. But this might not be a wise move. If your house is destroyed in a fire or a natural disaster, your investment is lost. It’s probably not worth running this risk for the sake of saving a few hundred euros.

Compulsory home insurance in case of co-ownership

If your home is in co-ownership, the co-ownership rules generally insist on taking out home insurance. This is usually group insurance covering all co-owners, whose contribution is calculated based on everyone’s share. This package is more attractive than individual policies taken out by everyone and covers both common and private areas.

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