Insurance of real estate

Real estate in Ukraine is considered the most reliable capital. In the conditions of the current global crisis, the population has sharply decreased confidence in banks and increased the desire to invest in the most stable and unshakable things that you can think of – real estate. However, with the apartments, offices and houses, too, there can be troubles: fires, flooding, landslides, etc. “From this no one is immune,” you will say and in part will prove to be right. Indeed, to prevent such trouble is almost impossible, but it is possible to minimize the losses caused by such misadventures. To do this, it is enough to insure your property.

Let’s say you were flooded by neighbors: the water spoiled the new wallpaper and fresh parquet after a recent renovation – a little pleasant. To not then bite elbows, Ukrainian insurance companies offer to insure their property: both the apartment itself, and the finishing (repair), and furniture in it. Insurance offices are needed in which there are no lattices on the windows, fire and burglar alarms, an iron door; facilities located near pipelines and thermal pipelines and airports (Ukrainian insurance companies insure even in the event of a plane crash and a fragment from it), etc.

Of course, insurance is not a cheap pleasure, because every year you will have to pay the insurance company fees – about 0.27-1.2% of the value of real estate. For example, if your house or office costs $ 100,000, then full insurance will cost $ 500 per year.

The financial issue is one of the reasons why the insurance business in Ukraine is not developing very dynamically. Not in favor of insurance say distrust of Ukrainians to banks and disbelief in insurance in general and real estate in particular. The situation has changed with the development of banking services in Ukraine: the banks insisted (and continue to insist) on mandatory housing insurance to buy housing on credit. In fact, they impose insurance, but, on the other hand, no one forces the client to borrow from the bank. Thus, collateral insurance is about 80% of the entire segment of this market. The rest is voluntary insurance, half of which (10%) is insurance of elite housing.

Recently, insurance companies offer a new type of insurance – fast and inexpensive – the so-called express insurance. To complete it, it takes a minimum of time, because the transaction does not even require an inspection of the apartment. The client often himself calls the value of the property and its annual payments are 50-300 UAH. in year. The downside of this policy is that it can only protect against small losses, when the damage from catastrophic losses, no matter whether expensive or cheap apartment, is unlikely to cover. In the event of an insured event, the payment to the victim will amount to approximately 10 to 50 thousand UAH.

Recently, another type of insurance has become popular – title insurance. This policy protects the newly-minted owner not from the troubles that may occur with his real estate, but from those that have already happened. These are the situations when, some time after the acquisition of real estate, the transaction is recognized as invalid. For example, if it was concluded by a mentally unhealthy person or a minor, or by forged documents, etc. In such cases, the purchase and sale transaction is declared invalid and the “happy” owner of new square meters loses both meters and money. This basically can happen in the secondary real estate market, where each apartment already has a “history.”

In any case, no matter how many insurance companies try to attract clients, offering both quick insurance and discounts to regular customers, those who want to insure themselves in the queue are not yet lining up. Experts believe that the situation will change when insurance companies learn how to competently present their services. Therefore, it’s up to small to offer the right thing.

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