Property Insurance: Find Out What the Regulations Provide

by Paolo Tanfoglio, CEO of Lokky

A property policy covers all risks associated with the property: from atmospheric to seismic events, theft, fire, damage, civil liability, assistance and legal protection. In Italy, to date, those who have decided to take out an insurance policy for real estate do not exceed 35%; this is because, in our country, taking out this type of insurance is not considered mandatory by law.
With Legislative Decree no. 59/2012, the Government had issued some provisions regarding compulsory home insurance, providing for the subscription of insurance aimed at protecting the property from any damage resulting from a natural disaster. This Decree was later converted into Law No. 100 of 2012, with the aim of obliging the owners of non-compliant properties to ensure the safety of the buildings, especially if located in areas particularly at risk of natural disasters.

In reality, although the foreseen obligation has not yet been applied, a form of compulsory insurance has been introduced in some way by the banks and, in some cases by the statutes of condominiums: in the case in which a mortgage is stipulated (law n. 100 of 2012), the banking institution imposes, in fact, explosion and fire insurance on the house to protect its right to be compensated.
The Save Italy Decree, approved in 2012, also provides some guarantees for buyers:

– The art. 28 states:
Banks, credit institutions and financial intermediaries, if they condition the disbursement of the mortgage on the stipulation of a life insurance contract, are required to submit to the customer at least two quotes from two different insurance groups.

– The art. 36 bis clarifies that:
The commercial practice of a bank, a credit institution or a financial intermediary which, for the purposes of stipulating a mortgage contract, obliges the customer to sign an insurance policy provided by the same bank, institution or intermediary is considered incorrect.

In the event of serious damage, the insurance company undertakes to pay the bank the loan for the purchase of a property. The mortgage policy therefore protects both the borrower in the repayment of the loan and the institution that provided the loan.
Once you take out a mortgage for the purchase of a property, you must take out the so-called Explosion and Fire Policy to protect yourself from possible events that could destroy the property and cause very serious economic damage to the owner, such as – for example – explosions of domestic systems caused by gas leaks, damage from smoke, vapors and gases, fires, explosions from lightning, electrical discharges. This policy not only covers damage caused to the building, but also to its contents, such as furniture, furnishings and objects.

Home insurance, if there is no existing mortgage or if you have inherited a building, rented or with usufruct, is always optional. However, if there is no insurance, any damage could affect all the assets inside and, in the case of a business, could cause serious economic losses, suspension of activity or even permanent closure.
If you inherited the house, the choice is personal; if you are renting, you must make sure that the insurance has not already been taken out by the owner of the property or by third parties. When we are talking about usufructuaries, taking out a home policy is in fact essential, since there is no full ownership of the property. In fact, according to the law, the usufructuary will have to enjoy the property without it deteriorating, using it in the best possible way and returning it at the end of the usufruct to the owner in the state in which he received it.

Finally, it must be underlined that the condominium statutes can also provide for the subscription of a home fire and explosion policy for individual homes to protect the private individual and other condominiums who could be damaged by possible fires and explosions.