What does owner's defect insurance cover?
Ejerskifteforsikring (owner's defect insurance) covers hidden defects that existed when you bought the property but were not found by the surveyor. It is your protection against the unknown — not the known. Everything listed in the condition report is excluded.
What it covers
- Hidden structural defects not visible during the survey
- Damp damage not documented in the condition report
- Hidden defects in the foundation, roof or load-bearing structure
- Damage arising as a consequence of a hidden defect
What it does not cover
- Defects listed in the condition report (grey, yellow or red)
- Normal wear and tear — an ageing roof, creaking floors
- Cosmetic issues (discolouration, scratches, stains)
- Damage arising after you took ownership
- Defects you knew about but did not investigate
Important: A condition report full of yellow defects protects the seller, not you. Those documented defects are precisely what the insurance excludes. How to read a Danish condition report →
Basic vs. extended cover
| Basic | Extended | |
|---|---|---|
| Price | approx. 7,000–15,000 DKK | approx. 12,000–25,000 DKK |
| Coverage | 5 years' cover · Hidden structural defects · Legal minimum standard | Up to 10 years' cover · Everything in basic · Illegal building work · Oil contamination on the land · Illegal drainage outside the foundation · Bathroom and toilet damage |
What the seller must pay
By law, the seller must offer to pay 50% of the premium for the cheapest policy presented during the sale process.
If the seller does not pay their half: The seller loses the right to limit liability for hidden defects. That means you retain the right to claim compensation directly from them for defects discovered years after purchase — even without insurance.
Three things to do before you sign
- Get at least one quote on owner's defect insurance before signing — the seller needs a policy to refer to in order to pay their half
- Compare basic and extended — for properties older than 1970, extended cover is often worth the extra cost
- Take it out before the handover date — it cannot be added afterwards
Is extended cover worth it?
Extended cover adds significant items that basic does not include — most importantly illegal building work, oil contamination, and bathroom damage. Whether it's worth the extra cost depends mainly on the property's age and condition:
- Properties built before 1960: Extended is almost always worth it. Illegal or non-standard building work from before modern building codes is common. Drainage systems from this era frequently have problems. Oil tanks (used for heating) were standard and may be buried in the garden.
- Properties from 1960–1980: Often worth it. Many extensions and conversions were done DIY without permits. Bathroom tiling and drainage from this era is a common failure point.
- Properties from 1990 onward: Basic cover is often sufficient. Modern building codes and permit requirements reduce the risk of illegal work. Oil heating is rare. Still worth comparing the premium difference.
Buried oil tanks (olietank): If the property was ever oil-heated, there may be a buried tank in the garden — even if the heating has since been converted to gas or district heating. If the tank has leaked, remediation costs can be enormous. This is only covered under extended, not basic.
What if the seller refuses to pay their half?
If the seller does not offer to contribute 50% of the cheapest policy premium, they lose the protection that the home buyer guarantee scheme is designed to give them. Specifically: they cannot use the tilstandsrapport and elinstallatørrapport to limit their liability for hidden defects.
This means you retain the right to sue them directly under the general rules of Danish property law for defects discovered after purchase — even years later — if those defects can be shown to have existed at the time of sale. This is a significantly stronger position for the buyer than normal, but pursuing it requires legal action and is costly.
In practice: if a seller refuses to contribute, it is often a negotiating position. Raise it formally in writing and ask them to confirm their refusal. Most sellers will reconsider once they understand what they are giving up.
How to make a claim
If you discover a defect after moving in that you believe should be covered, the process is:
- Document immediately. Take dated photos and video of the defect as soon as you find it. Do not have it repaired before the insurer has assessed it — this is grounds for rejection.
- Get a professional assessment. Have a qualified building surveyor (bygningssagkyndig) or relevant specialist put in writing that the defect (a) is structural or covered by your policy type and (b) is likely to have existed before you purchased the property.
- Report to your insurer promptly. Contact them as soon as possible after discovery. Most policies require notification within a reasonable period — delays can complicate claims.
- Insurer's investigation. The insurer will typically send their own surveyor to assess the defect. They will determine whether it was visible at the time of the original survey (in which case it's excluded as a known issue) or genuinely hidden.
- Settlement. If the claim is accepted, the insurer pays for approved repair costs. Note that the insurer pays for the defect repair, not for consequential improvements — if fixing a hidden damp issue requires replacing a floor, the floor is covered; upgrading it is not.
Time limits: You can only claim during the policy period (5 or 10 years from the handover date). Additionally, under Danish limitation law, you generally must notify a potential claim within 3 years of when you discovered or reasonably should have discovered the defect. Don't sit on a known problem.
What insurers typically reject
Most claim disputes arise from one of these scenarios:
- The defect was in the condition report. Even a small mention in the report — even as a K1/grey — makes that specific issue excluded. Read the report again carefully before filing a claim.
- The defect was visible at inspection. If a surveyor exercising reasonable care could have spotted it, insurers often argue it is not "hidden". UN (not investigated) areas are particularly contested — the insurer may argue you accepted the risk by buying without demanding an assessment.
- Post-purchase damage. If the insurer's surveyor finds evidence that the damage occurred or worsened after handover, they will reject the claim.
- Maintenance failures. A leaky roof that was a borderline K1/grey defect when you bought the property, but which worsened because you didn't maintain the gutters, will likely be rejected as a maintenance issue rather than a hidden defect.
