Mortgages and insurance: the most common mistakes in protecting your home
Buying a home is one of the most important financial and personal decisions in a person’s life. Often, however, attention focuses almost exclusively on the mortgage and the financing of the property, while insurance is treated as secondary or in a standardised way.
In reality, mortgages and insurance should be considered together. Properly structured protection makes it possible not only to protect the property, but also to preserve the family’s financial stability over time.
Thinking only about the cost of the mortgage
One of the most common mistakes is to look only at the mortgage rate, without considering the risks that could jeopardise the future sustainability of the financing.
Illness, disability, loss of income or death can have a direct impact on the ability to keep the home and meet the financial commitments made.
For this reason, it is important to take an overall view that considers not only the financing, but also the protection of the family’s income and assets.
Insufficient or uncoordinated insurance
Many people already have various insurance policies, but these are often fragmented, overlapping or incomplete.
The most common situations include:
- fire or property cover that is insufficient in relation to the actual value of the property
- lack of adequate protection in the event of disability or incapacity to work
- life insurance policies not coordinated with the mortgage
- deductibles or limits no longer consistent with the current situation
- lack of estate and family planning
Effective protection, on the other hand, comes from coordinating the various insurance and pension instruments.
The risk of underinsurance
Over the years, the reconstruction value of a property can change significantly. Renovations, rising material costs and structural changes can lead to underinsurance without the owner really being aware of it.
In the event of a major loss, this can result in partial compensation and unexpected costs for the owner.
Checking cover periodically makes it possible to maintain protection that is consistent with the actual value of the home and with changes in the family situation.
Protecting your home means protecting your family’s stability
A home is not just a material asset. It is often the centre of family life, future plans and the financial security built up over the years.
For this reason, proper planning should not be limited to looking for the best mortgage rate, but should also include a careful analysis of insurance cover, pension provision and the family’s ability to maintain its financial balance over time.
Independent advice makes it possible to assess financing, risks and protection together, building a truly sustainable and personalised solution.
Article written by:
Loïc Dubied
Deputy Head of Communication & Marketing CH, MSc in Business Administration HSLU