Insurance You Need for a House in Germany

Germany has no law that explicitly requires an owner to buy any insurance for their property, but in practice a property without insurance runs into plenty of problems: rental agreements usually require household contents insurance (Hausratversicherung), and banks usually require building insurance (Gebäudeversicherung) when granting a mortgage. So insurance related to a property does, in practice, matter in Germany. This article shares the types of property-related insurance available in Germany.

Building Insurance (Gebäudeversicherung) / Residential Building Insurance (Wohngebäudeversicherung)

Building insurance in Germany concerns owners only, since apartment buildings and other divided-ownership properties are mostly insured as a whole building by the property management company. If an owner is not sure of the building insurance coverage for their apartment, they can ask the property management company that represents the building. Building insurance also covers damage caused by fire, explosion or pipe failure, and even storm and hail damage — so cover can extend to related natural hazards, such as flooding caused by a landslide or heavy rain. Over time, buildings face many risks such as weathering and erosion, which can damage or even completely destroy them, and repairing or rebuilding a building is usually very costly — so building insurance provides real protection for owners.

Residential building insurance covers the structural components of the building, including:

• Roof
• Walls
• Doors and windows
• Terrace/balcony

All items permanently installed in the building are also covered, including:

• Built-in furniture and kitchens designed and made specifically for the building
• Permanently laid flooring
• Bathtubs and heating systems
• Stairlifts

Building fixtures are also covered.

This includes movable objects located inside the building or attached to its exterior, such as bins, bells and letterbox systems.

Cover can also be extended to include ancillary buildings — for example a garage or carport.

Household Contents Insurance (Hausratversicherung)

This type of insurance covers an owner’s belongings inside the property, such as furniture and appliances. Note that doors, walls, windows and the fabric of the property itself are not household contents — these should be covered by building insurance (Gebäudeversicherung) instead. Household contents insurance covers items such as indoor furniture, but only provides cover for events such as fire, flood and theft inside the home — normal wear and tear or deliberate damage are not covered. Most insurers pay out based on the value of the damaged or lost item, but policies also cap the maximum payout. Some insurers calculate the maximum amount they will pay using the property’s floor area in square meters multiplied by a fixed amount (usually around EUR 500-600). Some insurers can also include other costs, such as clean-up costs or the cost of changing locks after a break-in.

Third-Party Liability Insurance (Haftpflichtversicherung / Hausrat-Haftpflichtversicherung)

The last type is third-party liability insurance, which can be further split into personal liability insurance and owner’s liability insurance. The difference is that the former covers damage the policyholder causes to someone else’s property while in that other person’s home, while the latter — the more common form for residential property — covers accidents suffered by other people within the policyholder’s own property. We recommend that anyone simply investing in property in Germany consider owner’s liability insurance, while personal liability insurance can be decided based on individual need. Many German insurers also offer extended liability cover, for example including accidents caused by any family member, a pet, or a household employee (such as a cleaner).

Summary

In practice, German insurers typically offer a combined package covering all three types of insurance above for buyers to choose from. The price is usually somewhat lower than buying each policy separately. Package prices vary between insurers, and the content of cover can also be adjusted to the buyer’s needs. We recommend first working out your own needs and budget, then comparing quotes from several insurers.

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