Questions About Homebuyer Protection Insurance

Learn what Homebuyer Protection Insurance is and get practical guidance on what to do before, during and after discovering a hidden defect in your new home.

Please note that IDA Forsikring does not offer Homebuyer Protection Insurance. If you would like a quote, please contact our partner Gjensidige through this contact form.

What is Homebuyer Protection Insurance?

Learn more about what Homebuyer Protection Insurance is and how it can help protect you.

What is the difference between Building Insurance and Homebuyer Protection Insurance?

The main difference is that Building Insurance covers damage that occurs after you take ownership of the property. For example, if a storm or severe rainfall damages your home, Building Insurance may cover the damage.

Homebuyer Protection Insurance, on the other hand, covers hidden defects that existed before you bought the property. Examples include faulty plumbing or electrical installations that you did not identify before purchase.

What does Homebuyer Protection Insurance cover?

Homebuyer Protection Insurance covers the cost of repairing hidden defects if they meet the legal definition of a defect.

According to Danish legislation, this includes:

• Structural failures
• Leaks
• Deformation
• Weakening of building components
• Cracks

It may also include other physical conditions that significantly reduce the property's value or usability compared with similar properties of the same age that have been maintained to a reasonable standard.

The defect must have been present when you took ownership of the property.

Common claims include roof defects, subsidence, and faulty plumbing or electrical installations.

Are there any exclusions?

Yes. The insurance does not cover:

• Defects that are already described in the condition report or electrical installation report
• Damage caused by age, normal wear and tear or lack of maintenance
• Planned renovation work

What are hidden defects?

Defects that are not mentioned in the property's condition report or electrical installation report are considered hidden defects.

Homebuyer Protection Insurance helps cover the cost of repairing these defects. Without this insurance, you would usually have to pay the repair costs yourself.

How long does the insurance provide cover?

You can choose either five years or ten years of cover.

If you choose a five-year policy, you can extend it by a further five years, provided you do so no later than five days before the policy expires.

In most cases, purchasing ten years of cover from the outset is more cost-effective than extending a five-year policy later.

Does the insurance cover all defects that are not mentioned in the condition report?

No.

A common misconception is that Homebuyer Protection Insurance covers every defect that is not mentioned in the condition report.

The insurance only covers hidden defects that have caused damage, or where there is a significant risk that they will cause damage that substantially reduces the property's value or usability compared with similar properties of the same age and condition.

Are all Homebuyer Protection Insurance policies the same?

All insurers provide the same basic level of cover because Danish legislation defines the minimum cover requirements.

This applies whether you choose five or ten years of cover.

Some insurers also offer optional extensions that provide additional protection.

How much does Homebuyer Protection Insurance cost?

Prices vary between insurers, so it is a good idea to get several quotes.

When comparing quotes, consider not only the premium but also any exclusions, limitations or special conditions that may apply to the specific property purchase.

The seller must pay half of the premium for the insurance offer provided together with the purchase agreement.

As the buyer, you are free to obtain quotes from other insurers and choose a different provider. However, if you select a more expensive policy, the seller must contribute only half of the premium stated in the original offer.

Once again, please note that IDA Forsikring does not offer Homebuyer Protection Insurance. If you would like a quote, please contact our partner Gjensidige through this contact form.

Do I need to buy Building Insurance and Homebuyer Protection Insurance from the same insurer?

No.

You can purchase Homebuyer Protection Insurance from one insurer and your other insurance policies from another.

Does the insurance benefit both the seller and the buyer?

Yes. The insurance benefits both parties.

For the seller

The seller can be released from the usual ten-year seller liability by obtaining and presenting:

• a condition report,
• an electrical installation report, and
• a binding offer for Homebuyer Protection Insurance.

The seller must provide these documents before signing the purchase agreement and offer to pay half the premium.

For the buyer

The buyer gains protection against unexpected costs from hidden defects not identified before purchase.

A buyer can choose either five or ten years of cover.

Taking out the insurance is voluntary, but it is often a sensible choice. Without it, the buyer bears the full financial risk of any hidden defects discovered after the purchase.

Homebuyer Protection Insurance helps protect you against unexpected and potentially costly surprises when buying a home. If you do not take out the insurance, you will generally be responsible for the full cost of repairing covered defects yourself.