Building insurance in a Dutch VvE: rebuild value and underinsurance

Who insures a Dutch apartment building, and against what, is set by its deed of division: the law requires the splitsingsreglement to say so (article 5:112(1)(d) of the Civil Code). When the owners' association (VvE) insures the building, the insured sum should be the rebuild value (herbouwwaarde): what it would cost to put the building back up, not its WOZ tax value or its market value. If the sum is lower, every claim is paid out proportionally less.

That includes an ordinary leak, not only a fire.

Underinsurance, in numbers

Article 7:958(5) is short: if the insured sum is lower than the value the loss is calculated on, the payout is reduced proportionally. Take a 24-flat building in Utrecht whose policy still states a rebuild value of 3.6 million euros while a new valuation comes to 4.8 million. It is insured for 75 %. A leak from the riser that causes 20,000 euros of damage to two flats pays out 15,000, and the association covers the rest from its reserve fund or from an extra contribution by all owners. Some policies offer a guarantee against underinsurance, usually on condition of a recent valuation and yearly indexation; read that condition, because missing it removes the protection.

What the rebuild value is

It is the cost of demolishing, clearing and rebuilding the building on the same site in the same form, installations included. Land and location do not count, which is why a flat in central Amsterdam can have a high WOZ value in a building with a modest rebuild value.

Have it assessed by a recognised valuer and put an indexation clause in the policy. Our rule of thumb: a new valuation after every major renovation and at least every five years, with the yearly index in between.

The same figure sets the legal minimum for the reserve fund: without an up-to-date maintenance plan, the association must set aside at least 0.5 % of the rebuild value every year (article 5:126(2)). See our article on the mandatory VvE reserve fund.

What you insure yourself

What the association insures and what each owner insures differs by deed and by policy. Check three things in the policy conditions: whether improvements an owner made inside their flat, such as a new kitchen or bathroom, are covered or need separate insurance; whether glass is included; and how high the excess per claim is and who pays it. Who pays for a leak beyond the excess is covered in our article on a leak in a Dutch VvE.

This week, find two numbers in the policy: the insured sum and the date of the last valuation. If either is out of date, put a new valuation on the agenda of the next meeting. Owners who rent their flat out should also ask their own insurer what the association's policy leaves uncovered: the excess, improvements inside the flat and glass are the gaps to check, and they are cheaper to close before a claim than after one. A shared tool such as Vecinly keeps the policy, the valuation report and the reserve fund in one place, so a new board does not have to go looking for them.

Information updated September 2026. This article is for information only and does not constitute legal advice.