You’ve done it! After searching for ages and prevailing against hundreds of other applicants, now all you have to do is organise the move. But there is another stressful thing to do: you have to pay the rental deposit.
Up to three months’ rent – a sizeable sum, especially when your deposit for your old apartment has not yet been released. Many insurance companies offer rental deposit insurance for this. But does it actually make sense? Or are there better alternatives?
According to the law, a rental deposit account must be opened. With this solution, the entire deposit is put in an account with a bank. Even though it is still your money and you are entitled to interest on it, you cannot access it. And the interest rates are barely worth mentioning anyway in the current environment.
If you can reach an agreement with your landlord, it is better to put the rental deposit in an instant access savings account or a fixed-term deposit facility. That way, your money is still blocked but you usually earn significantly more interest on it. Remember that it is important to report this in your tax return.
You cannot or do not want to set aside so much money for the rental deposit and your landlord is open to alternatives? Then you should consider a rental deposit guarantee. The advantage to this is that the bank issues a guarantee vis-à-vis your landlord, meaning that you do not have to tie up any money. The disadvantage is that the fees are usually high. In other words, you will have more cash available initially but in the end you will pay for it.
Many Swiss people already use this option and the number is increasing. Rental deposit insurance promises a lot: either it pays the rental deposit in advance or you receive a guarantee, meaning that you do not have to pay anything when you move in. What is more, the insurance also covers any tenant damage when you move out.
If you take a closer look, however, you will discover a whole host of pitfalls. On the one hand, as with any insurance policy, you pay an annual premium. On the other, there is usually a closing fee. In addition, tenant damage itself is not covered by the rental deposit insurance – although these payments are advanced by the insurer, they must be repaid at the end of the rental relationship.
For that reason, we do not recommend taking out rental deposit insurance – in fact, we do not even offer it. The independent Swiss Tenants’ Association also advises against this type of insurance.
The best option is to pay the rental deposit yourself with the help of family or friends and invest your money in a good liability insurance policy instead. The advantage of this is that it also covers tenant damage.
Ideally, you should take out combined household insurance – then furniture, electrical appliances, clothing and valuables are insured, too. In short: everything that makes your home the most important place in your life.
When you move house, it is not just your address that changes – the value of your household contents usually does, too. This is a good opportunity to check the sum insured in order to avoid falling into the trap of underinsurance.
Household contents insurance is valid for up to three months in your old apartment. In your new apartment, it becomes valid straight away after the move.
If you move in together with your partner, you only need one insurance policy. The insurance automatically covers not only your shared household contents but everyone living in the household. Whether you keep your insurance policy or your partner’s is up to you.
In her over 20 years of experience at Allianz, Nina has worked in a number of areas of the company, including both distribution and the sales force. When she isn’t out and about with her dog, she can usually be found planning her next diving holiday or hike, tending to her garden or meeting up with friends.
Cover yourself against small and large mishaps – everything from broken window panes to personal injury – with personal liability insurance.
Be it glass breakages, theft or water damage – with our household contents insurance, your belongings are optimally covered against loss and damage.
With our all risks cover, your household contents are insured without any gaps. And with far more benefits than our traditional household contents cover offers.
