How does multi-risk insurance work?

How does multi-risk insurance work?

Do you want to hire a multi-risk insurance, or have you come across the requirement for this insurance in the home loan process? Learn how the insurance that protects the property works in this article.

10 Aug 20234 min

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If you only want to proceed with subscribing to a multi-risk insurance, contact the insurance mediators Poupança no Minuto. To clarify doubts and learn everything about multi-risk insurance, let's explain.

What is home multi-risk insurance?

Home multi-risk insurance aims to cover damage to the property or its contents, as well as civil liability.

This is one of the insurances required by banks when applying for a home loan, along with life insurance. It is one of the ways for banks to protect themselves when granting a mortgage loan.

By hiring a multi-risk insurance, in case of an incident at the property, it is insured with a certain capital according to the defined coverages.

For example, if you have fire coverage and a fire occurs in the property, the damages are repaired at the cost of the insurance company.

What does a multi-risk insurance cover?

A multi-risk insurance can have various coverage options, usually starting with a basic package recommended by insurers, to which additional options can be added according to preferences and needs.

According to the Insurance and Pension Funds Supervisory Authority (ASF), the most common coverages of a multi-risk insurance are:

  • Repair of damages caused in the building, in the own fraction or in other fractions;
  • Occurrence of risks other than fire, such as floods, storms, and electrical hazards;
  • Repair of damages caused to movable property in the dwelling;
  • Compensation for theft or robbery;
  • Civil liability of the policyholder and individuals in their household (if it is necessary to indemnify third parties for damages caused);
  • Indemnities for the death of the insured or spouse, as a result of fire, lightning strike, explosion or theft, when it occurs in the residence.

These are the pre-determined coverages, but additional complementary coverages can be added. The premium to be paid depends on the coverages contracted.

What affects the value to be paid for a comprehensive insurance?

The value to be paid for the multi-risk insurance can vary significantly, depending on some factors such as:

  • The insurance company, each one has the freedom to set their own prices;
  • Property features (construction type, materials, location, alarm connected to a central system, among others);
  • Coverages purchased.

Note that the property features impact the value to pay since they can define the risk assessment. The higher the risk level, the higher the price to pay for insurance.

How does property insurance capital work?

The secure capital of the property is defined by the policyholder at the beginning and during the contract. But based on what parameters?

Therefore, the insured capital must correspond to the property's reconstruction value, considering the type of construction, or the cadastral value if it is a building that will be demolished or expropriated.

Note that when determining this value that will be the insured capital, you must take into account all elements of the property, even with the proportional value of common areas (only excluding land).

Is it possible to update the insured capital?

Yes, but only the policyholder has the sole responsibility to do so. The insurer cannot update the capital on its own initiative.

To update the insured capital, the policyholder can choose between two types of automatic updates:

  • Indexed update - where the insured capital is updated every year according to a percentage indicated by the policyholder (for example, the insured capital value increases by 5% annually);
  • Indexed update - where the secured capital is updated every year based on the variations of the IE (building index) and IRH (housing filling index) indices.

What to be aware of when hiring a multi-risk insurance?

It is important to pay attention and verify some information when hiring comprehensive insurance.

When hiring this insurance, make sure you are provided with the following information:

  • Risks covered by insurance, and exclusions;
  • Optional coverage;
  • Franchises and their impact on insurance prices;
  • Insurer's criteria for determining the value of compensation;
  • Other conditions that influence the price to pay.

If, even with the questions clarified, you need help with hiring the multi-risk insurance, turn to the free services of mediators Poupança no Minuto. They handle all the intermediation with insurers, bureaucracy and save you some headaches. Hire the insurance to protect your property, without complications.

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