Home Insurance in Monaco: Are You Properly Covered?

 

 

Unlike in France, where tenants are legally required to take out home insurance, notably under French Law No. 89-462 of 6 July 1989 aimed at improving landlord-tenant relations, in Monaco this obligation stems chiefly from the lease itself. By contrast, an owner’s obligation to be insured derives directly from Law No. 1.329 of 8 January 2007 on the co-ownership of built-up buildings.

Whether required by law or provided for by contract, insurance remains essential. It covers the financial consequences of an insured event, while also protecting each party’s real estate and personal assets. It is also part of the general principle of civil liability set out, in Monaco, by Article 1229 of the Civil Code, under which anyone who causes harm to another through their own fault is liable to make good the damage.

Without adequate insurance, an owner or tenant could be required to personally compensate damage caused to a third party, a neighbour, a building or a rented property.

In real estate, and even more so where the properties concerned are of significant value, the financial consequences can quickly become substantial. In real estate, it is therefore not enough simply to be insured: cover must also be correct, in light of the property occupied, its actual use, its value, its outbuildings and the items stored there.

 

 

Being insured is good. Being correctly covered is better.

 

The risks covered are not the same for a tenant, an owner-occupier or a landlord. Everyone should therefore check that their insurance policy genuinely matches their situation, the use of the property, its type, its floor area and its particular features — a penthouse, a ground-floor flat, a cellar or a parking space can each present different risks — as well as the events to which they are exposed.

In a building held in co-ownership, it is also important not to overlook the insurance taken out by the managing agent on behalf of the co-owners. This insurance is intended to cover risks relating to the building, the common areas or shared facilities: the roof, the façade, shared columns, communal pipework, lifts, entrance halls, corridors, communal parking or plant rooms. It can in particular be called upon where an insured event originates in a common area or a shared element of the building.

In practice, which insurance applies will therefore depend on the origin of the event. A leak from an appliance belonging to the tenant may fall under their home insurance; water ingress from a roof, façade or communal pipe may involve the co-owners’ insurance; damage linked to equipment belonging to the owner may fall under the owner’s own insurance.

 

 

Occupants of the property: your insurance should match how you use the property

 

Whether a tenant or an owner-occupier, cover must be tailored to the way the property is actually occupied. The occupant is, after all, the person who lives there day to day and who may, as a result, cause damage to the property, to neighbours, to common areas, to belongings owned by third parties, or to their own personal effects.

The main risks to cover include civil liability, water damage, fire, theft or vandalism, and glass breakage, as well as electrical damage. Civil liability cover is particularly important, as it addresses damage that could be caused to a neighbour, a third party or the building’s common areas. For a tenant, it also covers damage that may affect the rented property or belongings owned by the landlord, on the terms set out in the policy.

Water damage is one of the most frequent risks. It can result from a leaking appliance, an overflow, poor maintenance of a seal or fitting, water ingress caused by improper use, or a leaking connecting pipe — for example, the hose linking the water supply to a washing machine.

Fire should not be overlooked either. It can start within the property itself, be caused by a faulty electrical appliance, or result from domestic negligence. Here too, insurance helps limit the financial consequences of an event that can affect not only the property occupied, but also neighbours or common areas.

The actual use of the property must also be taken into account. Occasional home working does not necessarily change the nature of the property. However, it can be worth checking whether the policy covers professional equipment or any damage caused in connection with that activity.

Extra care is needed where a professional activity is carried out from the property. A liberal profession, consultancy work, the registration of a company’s address at the property by a director, or any other business use, can change the risk assessment. Occupants should then check whether such use is permitted, whether the applicable regulations allow it, whether their home insurance covers the situation, and whether additional professional insurance is required.

Finally, both tenants and owner-occupiers should pay close attention to the cover for their personal belongings. Furniture, clothing, electronic devices, valuables, jewellery, watches, works of art, designer furniture, IT equipment, musical instruments, luxury clothing or accessories, and professional equipment may all be subject to compensation caps. These caps can prove insufficient if the true value of the items has not been correctly declared or reflected in the policy. For high-value personal belongings, it may be worth looking into additional cover or specific insurance policies, better suited to the nature and value of such items.

The position of a landlord is different where they do not occupy the property themselves. In that case, the risks to be covered are better addressed by non-owner-occupier (landlord) insurance, designed to protect the property, the owner’s liability and, depending on the cover taken out, certain situations not covered by the occupant’s own insurance.

The situation of the landlord is different when he does not occupy the dwelling himself. In this case, the risks to be covered are more covered by non-occupant landlord insurance, intended to protect the property, the owner's liability and, depending on the guarantees taken out, certain situations not covered by the occupant's insurance.

 

 

Landlords: a rented property remains a heritage to be protected

 

For the owner, not occupying the property in person does not mean the risk disappears. A landlord remains exposed to a number of situations.

It is important to notify the insurer of any change in occupation, as the risk may no longer be the same and certain guarantees may be affected. Non-owner-occupier insurance can then be of particular value, notably to cover the property in the event of a loss occurring during a vacancy, a change of tenant (for example during the tenant’s notice period), or in situations where the tenant’s insurance cannot be called upon.

Particular attention should also be paid to fixtures installed by the tenant. Unless the lease provides otherwise, such fixtures may become the owner’s property at the end of the lease, under Articles 445 et seq. of the Civil Code. This can change the risk insured. Examples include air conditioning installed by the tenant or a fitted kitchen.

A furnished property also calls for particular vigilance. The furniture belongs to the owner and can represent a significant value. In the event of a loss or damage, the owner must be able to prove that the furniture existed, its condition when new, its value, and its presence at the time the tenant moved in.

Cover should therefore be matched to the true value of the furniture. High-end furniture or specific equipment should be expressly mentioned. The inventory, for its part, should be consistent with the lease, the check-in/check-out report, photographs, any available invoices and the insurance policy.

If inaccurate information is given when taking out the policy, the insurer may consider that the risk declared does not match the actual risk. Depending on the terms of the policy, this can result in reduced compensation, an exclusion of cover, or a refusal to pay out.

 

 

In the event of a loss: the right response makes all the difference

 

When a loss occurs, the speed and quality of the steps taken are decisive.

The first step is to take any measures needed to prevent the damage from worsening and, where necessary, to call in the appropriate professional to stop the loss and identify its origin. In the case of a water leak, for example, this may mean calling a plumber. In the event of fire or immediate danger, the fire brigade should of course be contacted.

Identifying the origin of the loss is essential, as it determines which insurance should be called upon: the tenant’s, the owner’s, the co-owners’, or a third party’s. Depending on the cover taken out, the cost of tracing the origin of the loss may be covered by the insurance, as may the resulting damage. However, repairing the underlying cause of the loss itself is not necessarily covered, and should be distinguished from the consequential damage.

The loss must then be reported within the appropriate time limits. In the case of theft or burglary, the indicated time limit is a maximum of 48 working hours. For other losses, the indicated time limit is a maximum of 5 working days.

It is also essential to prepare all the supporting evidence needed to establish the existence and value of the damaged items: photographs, purchase invoices or any other useful documentation. Depending on the nature of the loss and the estimated amount of the damage, the insurance company may appoint a loss adjuster to assess the damage and the terms of cover.

Where repairs are needed, quotes matching the damage must be obtained — for example, for repainting to match the original finish.

 

 

Property management: anticipating to better protect

 

In property management, the lease is the first line of prevention. Clear clauses inform the tenant of their obligations, protect the landlord, and limit difficulties in the event of a loss.

The lease should in particular require the tenant to take out insurance covering their civil liability and tenant’s risks, and to maintain that cover throughout their occupation. A certificate of insurance should be provided when the tenant moves in, and then every year or on first request from the landlord or their agent. This certificate should correspond to the property actually let, including the main dwelling and any ancillary premises, such as a cellar, parking space or storage unit.

It is worth remembering, however, that a certificate of insurance only creates a presumption of cover. If the tenant stops paying their premiums, their policy may be cancelled by the insurer, and they may then no longer be covered against tenant’s risks. Hence the importance of regular vigilance throughout the tenancy.

The lease should also set out the tenant’s obligations in the event of a loss: informing the landlord, the agency and/or the managing agent without delay, as appropriate, and taking any measures needed to prevent the damage from worsening. Work and alterations carried out by the tenant should also be governed by the lease, as certain fittings — electrical wiring, air conditioning, plumbing, blinds, pergolas, home automation or professional equipment — can change the risk insured and may require the landlord’s prior approval.

Day to day, the estate agency thus plays a role of oversight and coordination: checking that the lease and the certificate of insurance are consistent, keeping written correspondence on file, promptly informing the managing agent in the event of a loss within the co-owned building, and anticipating particular situations, such as periods when the property is vacant or changes to the scope of the property let.

Insurance limits the financial consequences of a loss, reduces disputes, clarifies liability, protects the owner’s assets and secures the tenant’s occupation. When it comes to home insurance, the real challenge is therefore not simply to be insured, but to be insured consistently with the property occupied, its ancillary premises, its value and its actual use.

At Barnes Valeri Agency, we support our clients in this approach to risk awareness, helping them understand the main risks associated with occupying, letting or owning a property. Working with our partner insurance firms, we can direct them to the most suitable contacts, helping them better anticipate risks, safeguard their interests and protect their assets, whether they are tenants, owners or co-owners. In the event of a loss, our agency also stands alongside our clients to help with administrative procedures, coordinate exchanges with the various parties involved, and safeguard their interests. Our role is thus to ensure that the policies taken out are consistent with the actual situation of the property and its occupants.