Apart from wet floors in your own apartment, a burst pipe or leaking boiler often means a significant bill for damage incurred by your neighbours. Dagmar Gilden, the Home Insurance Product Manager at Seesam, warns that a lot of apartment owners still only have 10,000 euros in liability insurance cover despite repairs for water damage often costing significantly more at today’s prices.

“Most people who take out home insurance do so to protect their furniture and appliances and interiors,” Gilden says. “They give much less thought to accidents that start in their home and then damage their neighbours’ places. A burst pipe or problems with a washing machine or a tap left running can cause water damage to the apartment below. In situations like that, it isn’t just a question of inconvenience or wet ceilings, but who will pay for the repairs. And if you fail to reach an agreement with your neighbour, the matter might end up in court.”

The higher the floor, the higher the risk

As an experienced insurer, Gilden knows that when you live in an apartment building, it is common for water to spread to a number of apartments in the event of a pipe leaking, a washing machine breaking down or a boiler bursting. Situations in which no one is at home during the day, water suddenly starts spouting from somewhere, then gets under the floor and spreads to neighbours’ apartments are particularly dangerous.

“In the case of plumbing issues, the average loss per apartment is around 3000 euros,” Gilden explains. “But in a typical high-rise block, a serious leak on, say, the 3rd floor can affect quite a few apartments in one go. If it does a few thousand euros’ damage to each of them, then the total cost to be compensated can easily grow into the tens of thousands. And if the water gets under parquet flooring and damages kitchen furniture and appliances or electrical systems, the cost will be even higher.”

Add to this the significant hike in prices in recent years and people's increasingly expensive interior decoration choices, and the losses mount up even more quickly. Recent cases include one in which a leak from a neighbouring apartment resulted in 35,000 euros in damage, including to kitchen furniture and appliances. In another case, replacing some photographic wallpaper alone cost 9000 euros. Gilden says that in both cases, the amount covered under the liability insurance of the person responsible was just 10,000 euros.

The 10,000 euro recommendation per floor no longer applies

“Given the cases we dealt with last year, the long-standing recommendation to calculate your liability cover at around 10,000 euros per floor is clearly outdated at today's prices,” Gilden warns. “In a lot of ways, the amount you should cover yourself for depends on how many neighbours live below, next to and even above you. Where leaks are concerned, 20,000 euros might be enough for an apartment on a lower floor, but the higher up you are, the more cover you should take out.”

Even if you live on the 1st floor, you still run the risk of liability: water can spread to adjoining apartments or structures and damage the common parts of the building, and there are often storage rooms on the level below in which neighbours keep their belongings.

“When choosing how much to insure yourself for, it’s worth taking into account the apartments around you,” Gilden advises. “If your neighbours have things like expensive wallpaper, herringbone flooring or custom-made kitchen furniture in their apartments, the amount of damage you could inadvertently do to them can be much more than you might think.”

The insurer says that 50,000-60,000 euros in liability cover will let you sleep easy and guarantee adequate protection in most situations, but that for apartments on higher floors and in new-builds, you should consider covering yourself for as much as 100,000 euros.

“That will provide peace of mind in potential fire damage scenarios as well,” Gilden adds. “So when taking out insurance, it makes sense to bear the most expensive scenario in mind, not the minimum damage that might be done.”