Hi everyone,

I understand that there are some companies who provide security deposit insurance. We are thinking of using that as our potential landlord is asking for 3 months deposit and the cash can be used for better purposes, instead of sitting it in a bank.

Can anyone provide insight on your experiences and recommend any companies that you are using? Will your premiums lower if you move to another place after a couple of years if you dont claim on it? And vice versa - will it increase if your landlord decides to claim on the insurance if there's any damage to the property?

Cheers!

Hi there,

I have used http://www.swisscaution.ch/en for my deposit - no problem so far. Not sure about premiums and such, but the page should be in English, explaining everything.

Good luck!

Does your potential landlord actually accept a security deposit insurance instead of a security deposit? I've never had to get a security deposit insurance, however, the one by 'Zurich' and the Swiss Home Owners' Association seems to be OK judging from a colleague's feedback. Anyway, a security deposit insurance is usually overpriced and you should therefore only get such an insurance if you cannot afford to pay the security deposit yourself. As a rule of thumb, the annual premium shouldn't exceed 5% of the insured security deposit.

Cheers,
Martin

http://www.zurich.ch/site/en/priv/re...etkaution.html (CHF 60.00 basic premium if you have a personal liability insurance plus an annual premium of 4% of the security deposit already including federal insurance stamp duty of 5%).

Cheers,
Martin

Thanks for the prompt responses guys!

I was just reading on the Swiss caution website that should the lessor claims against us, they will directly pay claims to the lessor. But we must reimburse SwissCaution the amount paid out.

Does this mean that we have to take out private liability insurance to cover that amount paid to the lessor, in order not pay a single cent for damages?

Not saying that we will trash the property but after reading another thread earlier on how difficult it is getting deposits back in Switzerland, I am breaking out in cold sweat and just want to protect ourselves.

The vast amount of insurances offered here is not helping either!

Landlords can ask for maximum of 3 moths rent as a security deposit. This is particularly the case for new arrivals here who have no prior history.

The Swiss caution site mentioned in this thread seems pretty good. Swiss Federal law however, makes provisions for rental agencies & landlords to decline an insured security deposit.

The logic of this fails me. I am presently waiting for word from my rental agency about a Swiss caution security. They hold nearly 6000 Sfr as a deposit for the last 2.5 years. Strangely enough i was told by the contact at the agency that your country of origin affects if they accept a deposit from swiss caution .

The Swiss caution website makes no such discrimination and basically legally guarantees the deposit to the agency/landlord, regardless of where you are from. Evidently it is not as straight forward as i thought.

I would be careful not to give the impression that you cannot afford the deposit and simply ask the landlord if they accept a deposit security from whichever company you choose to do it with without any further explanation.

IF you have damages, yes, SwissCaution will of course get the money back - their service only guarantees to the landlord that up to 1, 2 or 3 months rent worth will be paid if damages occur.

An insurance covering eventual damages would of course be on the safer side, not sure if a normal Hausratsversicherung (don't know the translation) would help? I'm sure someone can shed light on that.

I am weighing the option of using this because I just think putting down 3 months worth of rental deposit is ludicrous!

We've rented in the UK previously, and its usually 1-2 months, but 3??? Its a whole lot of dough sitting in a bank, doing nothing and honestly, the money can be used for better purposes like furnishing the house etc. Thats my twisted way of thinking anyway.

I dont think the guarantee premiums are overpriced at 5% of the guaranteed amount. it save me having to deposit around 7000 chf in someones elses account , and leave me free to spend the money where i choose. For that im happy to spend the premiums charged. Swisscaution is a great way of doing that.

Well, it's never wrong to compare between different offers if you're looking for an insurance. The 5% annual premium is just about OK, however, 'SwissCaution' also asks for a rather ridiculous 'registration premium' and the federal insurance stamp duty isn't included in the 5% premium either.

Cheers,
Martin

A household insurance with coverage for tenant damages or a private liability insurance with coverage for tenant damages cannot replace a security deposit insurance: The first ones are insurances for the tenant, the latter is an insurance for the landlord (actually a guarantee by the insurance company).

Cheers,
Martin

Indeed - that's what I meant

Thanks for clarifying!

Martin, so basically if we want to avoid being fleeced and not pay any damage costs when we move out, am i correct to say that we'll have to take out a security deposit insurance (to guarantee the deposit) as well as a household insurance / private liability insurance?

Phew!!!

Sorry but the horror stories are making me extremely paranoid and the vast offerings of insurance here is mad! Still trying to get my head around all of them!

Summerrain, we also shared your thoughts about the money being better spent on furniture etc.

However as carcharhinus suggested, I would first check with your potential landlord/agency whether they will accept the deposit in this form.

We recently rented an apartment through Livit (one of the biggest real estate agents here) and we were told they would not accept Swiss Kaution and that we had to give the deposit in the traditional way (i.e cash in the bank).

With the demand for apartments so high here, I think they can afford to hold out for an applicant wishing to pay the deposit in the traditional way. In our case, we had already been told there were 6 other applicants for our apartment.

Obviously, this is only our experience and every place is different but I would check with the landlord/agency first.

Good luck!

Hey Kadie

Yes, we're checking on that possiblity of SwissKaution. so fingers crossed.

Getting a house here is really like winning the lottery. There was a flat we went to view the other night, and there were about 40 applicants!!!! Madness! Someone also mentioned that they went to see a flat with 200 over applicants once. It took me some time to push my jaw back up.

The short answer is yes, however, if you're afraid of being fleeced, you should consider a legal expenses insurance too.

Personally, I have a combined household and personal liability insurance including tenant damages and certain legal expenses with coverage for all household members. I consider an adequate insurance coverage as essential and it was therefore a no-brainer. Just shop around for the best insurance offer and make sure that tenant damages are covered …

Martin

Hi ,
looks like you picked not only the biggest agency in Switzerland , but also from what ive heard theyre one of the worst to deal with... in terms of not willing to budge on negotiations. Because they have so many people to deal with. Ive heard most reasonable agencies accept swisscaution. Money is money and as long as they have a guarantee it makes no difference to them. Except for the fact they have your cash .. and your earning interest on the money.

Are you sure? Last time I had a deposit, it was separate bank account in my name, but blocked until the landlord would give the OK to the bank to release it. No interest for them...

Yeah, I really hope it works for you, but just be prepared in case they say no!

But in all honesty, Swisskaution is not as good as cash from the landlord/agent's perspective. With 40 other applicants this factor alone could be enough to decrease your bargaining position.

I hope it all works out, I totally agree that the money is better spent elsewhere but I have decided to look at it as a sort of forced savings, so when we do go home (and leave a beautifully clean apartment!) we will have some cash in the bank!

That's a matter of fact, and also the reason why security deposit insurance offers are often aimed at less financially able tenants who rent from landlords for which a security deposit insurance is still better than no protection against tenants unable/unwilling to pay for damages at all. Given a choice, most landlords will prefer tenants able to make their security deposit by themselves for obvious reasons … in addition, security deposit accounts are a welcome business for Swiss banks, especially banks facing some serious cash outflow!

Martin