Building Insurance Act (GVG) - Legal Status (GVG)

1. The Buildings Insurance of Lucerne is a public-law institution with its own legal personality, headquartered in Lucerne.

2. The Buildings Insurance maintains its own accounts, independent of the state administration.

3. Only the assets of the Buildings Insurance are liable for its obligations. The canton is not liable.

**1. The Building Insurance is under the supervision of the Cantonal Council.**

1. The Government Council supervises the building insurance.

2. It is specifically vested with the following duties and powers

a. It issues the implementation provisions for this law.

b. * It appoints the members of the management commission and the audit office.

c. * It approves the annual report.

1. The Administrative Commission consists of five to seven members.

2. Ex officio, the member of the government council whose department is assigned the property insurance is part of the Administrative Commission.

3. As the supervisory body of property insurance, the Administrative Commission has the following tasks and powers

a. It oversees the management of the Directorate and regularly receives reports on the course of business.

b. It issues general service regulations.

c. Based on the report of the auditing body, it approves the annual financial statement and the annual business report for the attention of the government council.

d. It handles the other matters assigned to it by this law and other regulations.

1. The Directorate handles the ongoing management of the building insurance as the administrative body.

2. The Directorate is responsible for all matters pertaining to the building insurance that are not delegated to another authority.

1. The audit entity may consist of one or more individuals or a legal entity.

2. The audit entity examines whether the accounting and the annual financial statements comply with the legal requirements, and submits a written report to the administrative commission for the attention of the government council.

1. The Government Council is authorized to oblige state institutions and municipalities to cooperate in the enforcement of this law.

1. Appeals against decisions of the Directorate are admissible as administrative complaints to the Administrative Commission, and against their decisions as administrative court appeals, unless excluded by the Administrative Procedure Act.

2. Appeals against decisions concerning insurance values, premiums, and the assessment of damages may be lodged as objections, and against the objection decision, an administrative court appeal is permissible. In these appeal cases, the Cantonal Court also has discretionary control.

1. All buildings located in the Canton of Lucerne must be insured with the building insurance for the risks that are insurable by it and may not be insured elsewhere.

1. The insurance obligation begins with the commencement of construction works for a building and ends with its demolition.

1. The building insurance may exclude a building, in whole or in part, from the insurance if and as long as the risk of damage is extraordinarily high.

2. In the event of complete exclusion of the building from the insurance, the rights of the mortgage creditors pursuant to § 37 are preserved until the repayment of the mortgage debts, but no longer than two years from the date of exclusion.

3. In the event of complete exclusion, the premium must be paid in full for as long as the building insurance has to preserve the rights of the mortgage creditors as per paragraph 2, but no longer than two years.

4. In the event of partial exclusion, the premium is not reduced.

1. **Building-like objects may be insured under the building insurance.**

2. **The provisions of this law apply mutatis mutandis to the voluntary insurance of building-like objects.**

3. **The voluntary insurance is terminable. The owner and the building insurance are entitled to terminate it. The notice period is three months.**

4. **For important reasons, the building insurance may reject the request for voluntary insurance.**

1. The buildings are insured at their new value.

2. The building insurance may insure a building at its current value or agree on a fixed insurance sum with the owner if and as long as there are important reasons.

1. The Building Insurance adjusts the insured values of all buildings annually to reflect the level of construction costs if the construction cost index changes by more than 5%. This excludes buildings for which a fixed insurance sum has been agreed upon.

1. The Government Council shall issue the regulations concerning how the insurance values are to be ascertained and at whose expense.

1. The premiums, including premium surcharges for buildings with increased risk of damage, shall be determined by the government council in accordance with recognized insurance principles.

2. The premiums shall be set at a level such that the revenues are sufficient to compensate for the damages, cover operating expenses, maintain an adequate reserve fund, pay reinsurance premiums, and promote fire and natural disaster protection through prevention contributions.

3. The resources of the building insurance may not be diverted from their intended purpose.

1. The owner must immediately report any significant increase or decrease in risk to the building insurance. The premiums are to be adjusted according to the new circumstances.

2. Premiums that the building insurance has lost or wrongly received can be claimed retroactively or refunded for a maximum of the current and the preceding five years.

1. If the insurance value of a building or the premium rate changes during the year, the premiums are to be paid proportionately. Started months are calculated in full.

2. In the event of a claim, no premium refunds will be made for the current year.

1. For the premiums, there exists a statutory lien on the insured real estate property that takes precedence over other liens in ranking, without registration in the land register, for a period of two years from the due date.

1. In the event of a property transfer, the acquirer and the transferor are jointly liable for any outstanding premiums of the building insurance.

1. The building insurance company must establish a reserve fund that corresponds to its obligations.

2. It must invest this fund safely and profitably.

1. The building insurance company may conclude reinsurance contracts and participate in insurance associations.

1. If there is an annual surplus, the building insurance must deliver half of it, but not more than 1.5 million Swiss francs, to the state treasury.

2. If significant surpluses result over several years, the premiums or the benefits must be adjusted.

1. The buildings are insured against damages caused by

a. Fire, smoke, or heat;

b. Lightning strike;

c. Explosion.

2. Damages to buildings caused by falling aircraft or parts thereof shall be compensated by the building insurance, unless a third party is liable for compensation.

3. Damages arising from wear and tear or the ordinary use of the insured item for its intended purpose are not compensated.

1. The buildings are insured against damage caused by

a. Storm;

b. Hail;

c. High water, flooding, or storm surge;

d. Avalanches, snow pressure, or snow slide;

e. Landslide, rockfall, or rockslide.

2. Not considered natural damage and therefore not to be compensated are damages,

a. that are not caused by any of these natural events;

b. that cannot be attributed to natural forces of extraordinary intensity;

c. that occur due to continuous exposure;

d. that were foreseeable and could have been prevented in a timely manner through reasonable measures, such as damage resulting from poor construction ground, improper planning or execution of building and civil engineering works, or inadequate building maintenance.

1. Damage to buildings that arises directly or indirectly from alterations to the atomic nucleus structure, earthquakes, water from reservoirs, actions or exercises by the military or civil protection organizations, acts of war, or civil disturbances shall not be compensated.

2. The government council is authorized to include, wholly or partially, the excluded risks specified in paragraph 1 into insurance coverage as soon as it is possible under acceptable conditions.

1. If a building is completely destroyed and rebuilt, the building insurance compensates the replacement value, which is determined according to § 13 and adjusted to the construction costs at the time of the damage according to § 14.

2. If the depreciation of the building at the time of damage exceeds 50%, the compensation for total loss and reconstruction is limited to twice the current market value.

3. If the building is not rebuilt, the market value of the building must be compensated in the event of total loss. Compensation for non-reconstruction must not exceed the amount stated in paragraph 1.

4. The time limit for the reconstruction of the building is three years; it can be extended in special cases.

1. In the case of partial damage, § 26 shall apply mutatis mutandis.

2. Parts of the building that can be used for restoration shall not be compensated.

3. The building insurance is not obligated to cover additional costs due to accelerated restoration for operational or other reasons. § 39 remains reserved.

4. For damages where the repair costs are in an obvious disproportion to the damage, reasonable compensation for diminished value may be paid.

1. In the case of damage to unfinished buildings, only the parts and installations that are built-in and to be insured with the building at the time of the incident are to be compensated.

1. For buildings that are intended for demolition, compensation is limited to the demolition value.

2. In the case of demolition objects, the building insurance compensates for the costs of temporary repairs in the event of partial damage, but not exceeding the demolition value.

1. For buildings that are insured at fair value, the building insurance compensates this value in the event of a total loss and restoration.

2. For buildings for which a fixed insurance sum has been agreed, compensation in the event of a total loss is limited to the fixed insurance sum.

3. Otherwise, Sections 26-29 apply accordingly.

1. The compensation must not result in a profit, unless it is justified by the new value insurance.

1. The Building Insurance Also Reimburses

1. the costs incurred by the owner that are not unreasonable, even if the measures taken have been unsuccessful (see § 39);

2. necessary demolition and clearance costs, insofar as they concern the building, but no more than 10% of the compensation;

3. the costs of measures necessary to protect the remaining parts of the building, provided that the value of the remnants justifies the cost of such measures. If these measures serve purposes other than the protection of the remnants of the building or a part of it, the building insurance compensates for the portion of costs corresponding to its interest;

4. damage to crops, insofar as it arises from combating an incident, but no more than 5% of the compensation.

1. The government council may determine that each owner must bear a portion of the damage themselves in the event of elemental damage.

2. It establishes the amount of the deductible.

1. The government council determines the extent to which insurance indemnities are to bear interest.

1. The owner loses any right to compensation if they have intentionally caused the damage event.

2. If the owner has caused the damage through gross negligence, the building insurance is entitled to reduce the compensation according to the degree of fault.

1. If a third party is liable for the damage, the property owner's claims for damages are transferred to the property insurance to the extent that compensation has been paid. The property insurance is entitled, according to the provisions of civil law, to seek recourse against the responsible party.

2. The property owner is liable for any action that diminishes this right of the property insurance.

1. The building insurance is liable to mortgage creditors for damages up to the amount of the compensation, even if the owner loses the right to the compensation claim pursuant to § 35.

2. This liability only exists if the mortgage creditors can demonstrate that their claims are not covered elsewhere.

3. The owner must reimburse the building insurance for these payments.

1. The owner must report the occurrence of a loss event to the building insurance company without delay.

2. Claims for compensation for damages not reported within one year of the occurrence of the event are forfeited.

3. The executive council shall issue regulations on how the damages are to be assessed.

1. The owner is obliged to take measures to mitigate the damage after the occurrence of a damaging event.

2. If he culpably breaches this duty, the building insurance is entitled to reduce the compensation accordingly.

1. The building insurance is entitled to participate as a private plaintiff in the criminal proceedings against the party responsible for the damage.

1. The payment of compensation is made after the damage has been repaired; if not restored, after the clearance of the damage site.

2. The property insurance may make partial payments in accordance with the progress of construction.

3. The rights of the mortgage creditors under Article 822 of the Swiss Civil Code (ZGB) are preserved.

1. The building insurance may fully or partially reject a compensation claim if

a. the damage is reported culpably late or only after it has been repaired;

b. the owner has made significant alterations to the damaged building without the consent of the building insurance before the damage assessment.

1. The government council determines who is required to pay annual prevention contributions to promote fire and elemental damage protection, sets their amount, and names the recipient of the contributions.

2. The prevention contributions may not be used for purposes other than their intended purpose.

1. Fire Protection under the meaning of this Act includes

a. fire prevention in buildings;

b. the establishment and enhancement of adequate firefighting water facilities;

c. the proper training and equipment of fire departments;

d. effective alerting of fire departments;

e. other efforts in the interest of damage prevention and control.

2. Natural Hazard Damage Protection under the meaning of this Act includes

a. measures by the canton and municipalities to protect against natural hazards that significantly reduce the risk of elemental damage to buildings (enhanced object protection measures);

b. object protection measures by private property owners.

1. The obligations of the building insurance and the owners are governed by the law under which they were established.

2. The insurance values that have become legally binding under the previous law remain valid until a reassessment is conducted.

1. In the applicable decrees, namely in the SRL numbers 25, 25a, 28b, 29a, 37a, 38b, 371, 703, 740a, 742a, 746, 914, and 981, the terms "cantonal building insurance" and "building insurance of the Canton of Lucerne," but not "building insurance," are replaced with the designation "Building Insurance Lucerne."

**1. The following are repealed by this law:**

a. the Law on the Fire Insurance Institution of July 17, 1922;

b. the Law on the Insurance of Natural Damage to Buildings of October 9, 1956;

c. Section 88 of the Organization Law of the Canton of Lucerne of March 8, 1899.

1. This law shall enter into force on January 1, 1977. It is subject to an optional referendum.