Housing company insurance: what it covers and what it doesn't

Huoneistokierros · 18 July 2026 · 7 min read

In this article

What property insurance covers
What insurance usually does not cover
Is the sum insured up to date?
Home insurance complements property insurance
When damage occurs in an apartment
Checklists
Frequently asked questions
Sources

Many housing companies only discover after damage has occurred that their insurance does not cover everything. This happens especially when a leak has gone unnoticed for a long time or the damage is due to inadequate maintenance.

What property insurance covers

Property insurance is intended for sudden and unforeseeable damage. Depending on the scope and terms, it may cover, for example,

fire and smoke damage
storm damage
sudden leakage damage, such as burst pipes
damage to the building caused by vandalism and burglary
breakage damage and some electrical damage

The content varies between insurers and products. The Limited Liability Housing Companies Act does not require a housing company to have compulsory property insurance with specific content, so the scope of cover is at the discretion of the board and the property manager. The board should know what its own policy actually includes.

What insurance usually does not cover

Normal wear and tear. Roofs, pipes, facades and ventilation equipment eventually reach the end of their service life, and replacing them is part of the housing company’s maintenance.

Neglected maintenance. If gutters are not cleaned, the roof is not inspected or leaks are not acted on, the insurer may limit or refuse compensation. Many policy terms include safety requirements, and failing to follow them affects compensation.

Gradual damage and mould. If water has been seeping into the structures for months or years, it is not usually sudden damage. A dripping tap, a small roof leak or a slowly leaking drain can lead to large repair costs with no compensation. The same applies to mould damage, which usually results from long-term moisture. Damage caused by construction and installation defects is also often excluded.

The difference shows up on the bill. A broken roof tile or a loose penetration found in an annual inspection is a small repair. The same damage left unnoticed for years can mean replacing insulation and ceilings in several apartments, and insurance will not necessarily pay for it. Regular inspections should cover at least the roof, facade and balconies, drainage in the yard, building services and safety-related items.

Is the sum insured up to date?

Construction costs have risen significantly in recent years. The board should check from time to time

whether the sum insured is enough for rebuilding at current prices
whether the excess is appropriate for the company’s finances
whether changes have been made to the building that the insurer needs to be told about
whether additional cover is needed, for example for the duration of an upcoming major renovation

It is worth putting insurance out to tender regularly and comparing the scope of cover and excesses, not just the price. Make sure in the contracts that contractors and the maintenance company are insured.

Home insurance complements property insurance

A shareholder’s home insurance covers their movable property and, depending on the terms, the surfaces and fixtures in the apartment for which the shareholder is responsible. Home insurance usually also includes liability and legal expenses insurance. A shareholder needs home insurance even if the housing company’s property insurance is comprehensive. If the apartment has a more valuable kitchen or bathroom than usual, it is worth checking separately that the home insurance is adequate.

When damage occurs in an apartment

Maintenance responsibility, liability for damages and the scope of insurance cover are three different things. Maintenance responsibility tells you whose job the repair is. Liability for damages determines whether someone has to pay for damage they caused. The policy terms tell you what the insurance pays.

The company is responsible for structures, insulation and main systems and, from 1 October 2026, for the apartments’ windows as a whole. The shareholder is responsible for the inner parts of the apartment, such as surfaces and fixtures, unless the articles of association provide otherwise. If a fault in a part the company is responsible for, or repairing it, damages the inner parts of an apartment, the company repairs them to the company’s basic standard. Any part exceeding the basic standard, such as a shareholder’s more expensive bathroom renovation, is left to the shareholder and their home insurance. More on the division of responsibilities in the article on division of responsibilities in a housing company.

Example: a dishwasher leak

A leak can damage the machine, the kitchen units, the floor, the structures, the apartment below and the resident’s belongings. A single incident therefore raises several questions: where did the water come from and why, what was damaged and who is responsible for it, is anyone liable for compensation, and what do the policy terms say?

The shareholder’s home insurance may cover their own property. Repairs to the structures are handled under the housing company’s property insurance if the damage falls within its scope of cover. If the shareholder caused the damage through negligence, their liability insurance may also come into play.

When the damage is caused by a shareholder

A shareholder must compensate damage they have caused to the company or another shareholder by intentionally or negligently breaching the law or the articles of association (Limited Liability Housing Companies Act, chapter 24, section 2). If the damage results from a breach of the shareholder’s maintenance obligation or of the provisions on alteration work, negligence is presumed unless the shareholder shows they acted with due care.

If a shareholder has in this way damaged a structure that the company is responsible for and the inner parts of a neighbour’s apartment get wet, the company repairs the neighbour’s apartment and recovers the costs from the shareholder who caused the damage. The liability insurance in the home insurance may cover such damage according to its terms. Water damage can, however, occur without anyone being negligent, so the mere fact that damage has occurred does not settle liability.

From 1 October 2026 the shareholder must also take good care of company premises and areas in their use where the right of possession is not based on the articles of association or a lease, such as the yard area in front of the apartment or a storage space made available to the shareholder, and must report any defects they notice there to the company (chapter 4, sections 3 and 8). Maintenance responsibility for these spaces did not pass to the shareholder.

Report it immediately

In policy terms, a sudden leak and gradually developing moisture damage are very different situations, so the cause needs to be established. A shareholder must notify the company without delay of a fault that the company is responsible for repairing (chapter 4, section 8). The sooner a leak is noticed, the smaller the damage and the clearer the compensation situation.

Temporary accommodation

Repairing water damage can take weeks. It is worth asking your own home insurer about the costs of temporary accommodation. Whether they are covered usually depends on whether the original damage is covered by insurance and on the content of the terms. For a tenant, the lease and the tenant’s own home insurance also play a part.

Checklists

For shareholders:

Is your home insurance in force, and does it cover your movable property adequately?
Does it include liability and legal expenses insurance?
Have valuable alterations been made in the apartment, and has their insurance cover been checked?
Do you know whom to report a leak to in the evenings and at weekends as well?

For the board:

Does the board know the main features, excesses and most important limitations of the property insurance?
Has the cover been checked before major renovation projects?
Has a procedure for damage situations been agreed: who reports, who calls in the drying company and who documents? Have shareholders been told about it?

Preventing water damage is covered in the article on water damage in a housing company.

Frequently asked questions

Does property insurance cover all water damage?

No. Whether it is covered depends on the cause of the damage and the policy terms. Damage from a long-running leak or from inadequate maintenance is often excluded.

Who pays when water damages the surfaces in my apartment?

If the cause lies in a part the company is responsible for, the company repairs the surfaces to the basic standard. Anything above the basic standard, together with movable property, is a matter for the shareholder and their home insurance.

Does a shareholder need home insurance if the housing company has property insurance?

Yes. Home insurance covers movable property and, depending on the terms, the inner parts for which the shareholder is responsible, and it usually also includes liability insurance.

Sources

This article provides general information and does not replace case-specific legal or technical advice.