At Luko, your flat is guaranteed at replacement value, with a 33% replacement value buy-back
What does this mean in practice?
If your flat is destroyed and the conditions of application of your contract are met, an expert will calculate the cost of reconstruction.
This is the amount needed to rebuild an identical flat in the same location.
The expert will also determine the rate of depreciation applied to your property.
The compensation will then be paid in two stages:
Before the works: a first payment corresponding to the cost of reconstruction with deducted depreciation (this payment cannot be higher than the market value*, if this one is lower)
After the work (which must be done within 2 years): on presentation of the invoices, a second payment is made, corresponding to the purchase of the obsolescence, within the limit of 33%.
*The market value is the price at which you could have sold your property on the day of the loss. In short, you cannot be reimbursed for the reconstruction of your property for a sum higher than what it was worth on the market at the time of the loss.
Let's take a concrete example:
After a loss, the cost of rebuilding your flat is estimated at €200,000
If the depreciation is less than 33%.
For example: The depreciation is fixed at 15%.
The first payment will be : 200,000 - (15% of 200,000) = 200,000 - 30,000 = €170,000
The second payment will be the purchase of the 15% depreciation, i.e. €30,000
→ You will therefore be fully compensated for the cost of reconstruction
If the depreciation is greater than 33%.
If the loss of value determined by the expert is greater than 33%, the difference will remain at your expense.
Let's take the same example, with a reconstruction cost of €200,000, but a depreciation of 35% (we reassure you, such a high rate of depreciation is rare).
The first payment will be : 200,000 - (35% of 200,000) = 200,000 - 70,000 = €130,000
The second instalment will be the buy-back of the 33% depreciation, i.e. €66,000
→ Luko will therefore compensate €196,000
The remaining 2% of the depreciation will be paid by you. In this case: 4000€.
☝️ Please note :
If the reconstruction is made elsewhere than on the site of the destroyed dwelling, whereas there is no absolute impossibility to rebuild on this very site (this impossibility having to result from legal and regulatory provisions), the compensation will not be made at replacement value but with depreciation deducted. There will therefore only be the first payment.