Insurance in Switzerland

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Insurance in Switzerland

The Swiss are very safety-conscious, one reason why they are the best-insured people in the world.

There are basically two types of insurance, which need to be clearly differentiated: obligatory insurance, which is compulsory for everyone, and voluntary insurance, which is taken out to cover specific risks.

Obligatory Insurance

The following types of insurance are compulsory in Switzerland:

• Health and accident insurance
• Insurance for motor vehicles and bicycles
• Old age and surviviors insurance (AHV)
• Disability insurance (IV)
• Insurance for loss of earnings (EO on the payslip)

Health insurance

All residents of Switzerland regardless of their age are subject to the health insurance law (KVG in German). Under this legislation everyone has to take out obligatory health insurance for basic medical treatment, drugs and cover for inpatient treatment in a general hospital ward. 

Citizens of other countries who remain in Switzerland for more than three months or settle there are also subject to this condition. Health insurance must be taken out within three months of entering Switzerland; newborn babies also need to be insured within this period. 

All health insurers provide the same benefits under the obligatory insurance plans, but not for the same premiums, so it is recommended to compare the premiums offered and change insurance if necessary.

Those requiring more than just basic treatment will need to take out supplementary insurance to cover the cost, for example for a private ward or for dental treatment, both of which, in contrast to some other countries, are not covered by obligatory insurance.

Accident insurance

Employers are obliged to insure their employees against occupational and non-occupational accidents. Employers pay the premuims for occupational accidents; employees pay those (maximum two percent of their wages) for non-occupational accidents. Children and individuals who are not gainfully employed can get accident cover included in their health insurance or take out separate accident insurance

Vehicle insurance

Third party insurance is compulsory for all motorised vehicles. Vehicle owners can choose whether to insure against fire and theft or to take out comprehensive insurance.

Bicycle insurance

Third-party insurance is also required for bicycles. The insurance sticker (Velo-Vignette), that has to be attached to the bicycle is sold at post offices and retailers , as well as bicycle shops and Migros department stores).

Old age and survivors' insurance (AHV)

The AHV is a general state insurance, compulsory for all individuals resident or employed in Switzerland. Contributions are payable from 1 January of the year after the twentieth birthday to retirement age. Individuals who are gainfully employed before their twentieth birthday are obliged to pay contributions from 1 January of the year following their seventeenth birthday. Contributions are divided equally between the employee and employer and amount to 8.4 percent of the  salary. Self employed persons pay 7.8 percent of their income directly to their local compensation fund.

Invalidity insurance (IV)

The Swiss Invalidity Insurance (IV) is a further compulsory nationwide insurance. The insurance assists disabled people with rehabilitation or provides subsistence payments. Contributions to the IV amount to 1.4 percent of wages and are divided equally between the employee and the employer.

Income replacement scheme (EO)

The income replacement scheme is a compulsory insurance for all individuals in Switzerland. Those serving in the Swiss Army or doing alternative civilian services are indemnified for loss of earnings via this scheme. Both employers and employees contribute 0.3 percent of their wages to the EO.

Unemployment insurance (ALV)

Employees are compulsorily insured against loss of income through unemployment. Again, both the employee and your employer share in paying 2 percent of their salary; the payment is deducted directly from wages. Self-employed persons have to take out private unemployment insurance.

Agreement With the EU on Freedom of Movement

Switzerland has concluded a specific social insurance agreement with each EU member state. These contracts are based on the principle of equal treatment for all. AHV and IV pensions for which contributions were paid in Switzerland are paid out abroad to citizens of EU states. Persons who were insured in a number of states receive a partial pension for each state. As long as contributions have been paid for at least one year individuals are entitled to claim an AHV or IV pension. However, even the smallest claim cannot be paid out as a once and for all lump sum payment. Persons in gainful employment are only subject to the social insurance system of one country even if their work takes them to various countries. 

• For further information from the Federal Office for Social Insurance: Click here

Voluntary Insurance

Two of the most important and worthwhile voluntary insurances are private public liability insurance and household effects insurance.

Private public liability insurance

Public liability insurance covers claims brought against a person for any damage or injury that may be caused by a person (or their pets) to other persons. It also covers damage to rented apartments. Such insurance costs between CHF 100 and CHF 150 per year for a maximum cover of CHF 5 million and can usually be combined with a household effects policy.

Household effects insurance

The household effects insurance covers losses through burglary and theft and damage to a person's property by fire, water and other external influences. It is important when applying for the insurance to enter the correct value of  household effects and from time to time to re-estimate their value and update the insurance policy. Failure to do this may lead to significant losses if the person is underinsured as the insurer reduces the payment by the percentage by which a person is underinsured. 

For example: if the contents of a household are insured for CHF 300,000 but their actual value is CHF 360,000.00 (a 20 percent difference) and everything is lost due to a fire, the insurer will subtract 20 percent from the insurance payment, meaning the insured will only receive CHF 240.000 instead of 300.000.

Comparing Insurances Policies

The scope of benefits and the premiums vary dramatically from one insurance company to another, including health insurers. Insurance premiums and costs can be compared on the website comparis.ch.

Information supplied by the Office for Economy and Labour
Department of Economics of the Canton of Zürich
Walchestrasse 19, 8090 Zürich, Switzerland