A recent survey has shed light on the priorities of Czech citizens when it comes to safeguarding their assets, revealing that they prioritize protecting their properties over their lives and health. However, despite recognizing the importance of property insurance, many property owners fail to address the issue adequately. Even those who have insurance coverage often neglect to update their policies regularly, resulting in a significant risk of underinsurance. With the continuous rise in property and construction costs, it is crucial for Czechs to consider updating their insurance policies annually to ensure adequate coverage.

According to the survey conducted by the Czech Insurance Association (ČAP), over four-fifths of Czech citizens reside in their own properties, whether apartments or houses, while others own recreational properties worth significant amounts. Safeguarding these valuable assets against unexpected events is of utmost importance. However, the survey also revealed that more than a quarter of Czech households consider insurance for their homes to be unnecessary.

Relying solely on state assistance in the event of major natural disasters is not a reliable strategy, as the state’s support is often limited. Without insurance coverage, individuals may find themselves without compensation for damages incurred. Yet, attempts to save on insurance premiums by deliberately underinsuring properties are also ill-advised. It is crucial for property owners to accurately report the value of their assets to insurance companies to ensure adequate coverage.

The survey findings also highlighted the prevalence of underinsurance in the Czech Republic. Due to the significant escalation of property prices, construction materials, and labor costs in recent years, insurance policies taken out several years ago may no longer provide sufficient coverage for the property’s current value. Data from ČAP indicates that approximately 70 percent of properties in the country are underinsured, often by more than 50 percent.

Furthermore, the survey revealed that property owners neglect to update their insurance policies regularly, exacerbating the risk of underinsurance. A considerable portion of respondents reported infrequent policy updates, with one-fifth of respondents never updating their coverage and a quarter doing so every five years or less frequently.

Given the current inflation rate and the continuous increase in property and construction costs, it is crucial for property owners to regularly review and update their insurance policies. Even those who update their coverage at least once every three years are still at risk of underinsurance. To safeguard against this risk, it is advisable for property owners to consider annual updates or automatic policy indexing that accounts for inflation and ensures adequate coverage.

Proper insurance coverage is essential for protecting one’s property and mitigating financial risks in the face of unforeseen events. By prioritizing regular policy updates and accurately reflecting the value of their assets, Czech property owners can ensure that they are adequately protected and have peace of mind regarding their valuable investments.

Article by Prague Forum