What is damage insurance in the Netherlands?
Damage insurances are meant to compensate loss of assets of the insured party. There are different kinds of damage insurances:
1. Household insurance
Household insurance insures your household against theft or fire. You really need this insurance, also as a tenant. The landlord’s fire insurance only covers the house, not the household.
2. Liability insurance
This insurance covers damages inflicted to third parties, for which you are held liable. Examples are loss of equipment which you have lended or spilling a glass of red wine on your neighbour’s brand new carpet. Even though the risk of damages is small, the costs of an event may be substantial. The premium therefore fully justifies elimination of this risk.
3. Legal assistance insurance
If you are determined to stay in the Netherlands for several years or longer, it makes sense to save for your retirement. Such savings are tax deductable, so that you have a saving of at least 35% on your income tax, while you are building a financial provision for your future. Accrued retirement savings are taxable if you get the pension or release the funds, but in case of emigration you can liquidate these funds on a tax fee basis under certain conditions. You may also want to purchase additional long term disability coverage, as existing state insurances have only limited coverage. Retirement savings planning is complex and require a thorough understanding of your needs.