Homeowners Insurance In Germany
Homeowners insurance in Germany protects your house or apartment. It is also called residential building insurance or Wohngebäudeversicherung in German. Homeowners insurance covers the costs of repairs and reconstruction for your home if it is damaged by fire, a storm or tap water. Almost everyone that owns a house or apartment in Germany has homeowners insurance. This guide has all the information you need on German homeowners insurance in English!
What is homeowners insurance in Germany?
Homeowners insurance in Germany covers losses and damages to an individual’s house or apartment. It’s important to note that this is not the same as home contents insurance. Homeowners insurance protects your home itself, while home contents insurance covers all of your household belongings. For example, if a water pipe bursts and damages your walls and carpet, homeowners insurance would cover the walls and home contents insurance would cover the carpet. If you own a house or apartment in Germany then you should consider getting homeowners insurance.
Who Needs Homeowners Insurance in Germany
If you own a house or apartment in Germany, then you should get German homeowners insurance. You are not legally obligated to buy homeowners insurance in Germany but it is highly recommended. Your home is a big investment and there is a lot of capital in it. Therefore, it makes sense to protect yourself financially in case of damages with homeowners insurance.
It is important to note that you do not need homeowners insurance if you are renting a house or apartment. The owner of the home is responsible for buying homeowners insurance, not the tenant.
Homeowners insurance covers damages that fire, storms and tap water cause directly to your home itself. This includes the roof, the walls and the foundation. Many insurance providers also cover damages to anything permanently installed in your home such as a built-in bathtub or heating system. Coverage for outdoor facilities and outbuildings depends on your homeowners insurance provider. Some providers cover garages, carports and workshops in the normal insurance package, while other providers include it separately. The same applies to garbage boxes, fences, garden walls and awnings. Homeowners insurance in Germany does not cover any of your property that is movable, such as patio furniture and garden chairs — home contents insurance insures household belongings.
The fire component of homeowners insurance in Germany also includes damages that lightning, explosion or implosion cause. Furthermore, it applies to permanently installed electrical installations.
It is important to note that you must have a smoke detector installed in your home. If you do not have a smoke detector then your insurance might not pay for damages due to fire. The building regulations of most federal states stipulate that smoke detectors must be installed in bedrooms and corridors.
Tap water insurance pays for damages that tap water, frost and other water breakages, such as a burst pipe, cause. For example, if calcareous water or frost causes a pipe in your house to burst, your homeowners insurance company in Germany will step in.
Homeowners insurance in Germany covers storm damages that category 8 wind and hail cause. For example, if hail damages your roof then your German homeowners insurance company will pay for repairs (up to the sum insured amount). Homeowners insurance does not cover damages that flooding, earthquakes, landslides, avalanches or heavy rain cause. In order to insure against natural hazards, you must expand your insurance coverage with an add-on known as elementary damage insurance.
Many homeowners insurance policies offers add-ons. Three common add-ons are coverage for damages due to natural forces (flood, earthquake, subsidence, landslide, snow pressure, avalanches, backwater), broken glass, and solar panel damage.
In the event of a total loss, homeowners insurance will cover the cost of a new home with the same design and equipment, built at today’s prices (replacement price), including all costs for the architect, the planning and the actual building construction.
Homeowners insurance will cover costs for a temporary rental apartment, if a fire makes your house/apartment uninhabitable.
What’s Not Covered
It is important to know what homeowners insurance in Germany doesn’t cover. Household items, personal injury, unfinished buildings, war, are not covered by homeowners insurance. In addition, German homeowners insurance does not cover some cases of fire damages, water damages, and storm damages. Read below for more detailed information about these conditions.
Homeowners insurance in Germany does not cover household items. This is where it is very important to know the difference between home contents insurance and homeowners insurance. Home contents insurance covers household items, while homeowners insurance covers the home itself. Imagine you turned your house upside down. Home contents insurance would cover what falls out and homeowners insurance would cover what is left attached to the structure of the house. For example, homeowners insurance would not cover your living room couch or your coffee machine but it would cover the walls in your house and your roof.
Homeowners insurance does not cover damages that occur to other people in your house or on your property. This is the role of personal liability insurance. For example, homeowners insurance would not cover a pedestrian slipping outside on the icy path to your front door. You would need personal liability insurance for this.
Homeowners insurance does not cover unfinished buildings. Therefore, it is a good idea to get fire protection insurance (also called fire shell insurance, Feuerrohbauversicherung) while your home is in the process of being built. Fire protection insurance can protect you from financial disaster. It pays if the unfinished home burns down or if lightning strikes your unfinished home. In addition to the home itself, fire protection insurance covers building materials and damage from smoke and fire-fighting work.
Homeowners insurance does not cover damages that war causes.
Homeowners insurance in Germany does not cover fires caused by anything that you consciously ignite in your home, such as a chimney fire. Coverage for damages that result from over voltage depends on which insurance company you choose.
Homeowners insurance does not cover groundwater damage, flooding and weather-related backwater damage.
German homeowners insurance does not cover damages that storms below category 8 cause. It also does not cover damages that resulted from open or leaky windows.
How much does homeowners insurance cost?
The cost of homeowners insurance in Germany varies significantly between providers. Some homeowners insurance plans cost as little as €100 per year, while others cost more than €400 per year. Your insurance provider will take into account a variety of factors to calculate the sum insured and your premium. First, your insurance provider will start with the new value of your home. Then it will consider factors such the appraisal, the size of your house, location and the reconstruction value.
Factors that impact the cost of homeowners insurance in Germany:
- Appraisals: An appraiser will evaluate your house or apartment to determine its market value.
- Size of your house: Your insurance company will take into account the size of your house. If your entire house catches on fire and burns down, then you will need to have it rebuilt. Therefore, your insurance company will calculate the estimated amount of the local price for a home of the same size and type of construction.
- Reconstruction value: Also called moving new value, your homeowners insurance provider will evaluate the estimated cost of reconstructing your home based on how your house is constructed. For example, fire-safe materials such a brick are cheaper to insurance than wood. This is calculated on a yearly basis.
- Personal claim history: If you file more than the average number of claims then your premium will be more expensive.
- Location: Your address affects how much you will have to pay for homeowners insurance. There are many reasons for this. Imagine there are two identical houses on opposite ends of the neighborhood. One house is closer to the fire station, police department and fire hydrant than the other house. The closer house will likely be cheaper to insure.
- Age of your house: The age of a house or apartment greatly impacts the cost of homeowners insurance in Germany. New houses with new electrical lines, pipes, insulation, etc. are less vulnerable to failures than old houses. For example, the probability that a pipe breaks in a new house is lower than that of a 30-year-old house.
- Add-ons: The more add-ons you include, the more expensive your premium will be.
What should I do in the event of damages?
One of the first things you should do is take any available measures to prevent further damage. For example, if the tap water is damaged then you should turn off the main tap water pipe in your house as soon as possible. If hail damages your roof, then you should put a tarp over your roof. It is important to note, however, that this does not mean you need to completely repair the damages. It means that you need to do your best to avoid additional damages.
There is always the possibility that you will face a dispute with your homeowners insurance company about the terms of your policy. Therefore, it is very important that you document the damages to your house. You can do this with photos and a written report. You need to report the damages to your insurance company immediately. Your insurance company might send an expert to your house to evaluate the damages.
If you have to repair damages before the official report is written because your house would otherwise be unfit to live in, then you need to discuss this with your insurance company. Always document how the damages are being repaired and save invoices that show the repair costs. Document any damaged parts that you throw away.
Frequently Asked Questions (FAQ)
Why Is Homeowners Insurance Important?
- Your homeowners insurance will help cover repairs or rebuilding after damages, up to your sum insured amount.
- If you owe money on your mortgage and an incident totally destroys your home, you’re still responsible for paying your loan, except if you have homeowners insurance. Homeowners insurance will cover the cost of rebuilding your home.
When Should I Get Homeowners Insurance?
You should buy homeowners insurance before you ask a mortgage company for a loan. While the law in Germany does not require you to have homeowners insurance, most mortgage companies will not give you a loan unless you have homeowners insurance.
Can My Homeowners Insurance Provider Cancel My Policy?
You might be wondering, “Can my homeowners insurance company drop my contract?” The answer is yes, your homeowners insurance company can drop your contact (also referred to as a non-renewal). It is important to note, however, that this is different from your insurance company canceling your contract.
If your homeowners insurance company drops you, this means your insurance company will not renew your policy after its expiration date, and you will have to find a different insurance company. Your insurance company will tell you that it is dropping your policy with enough time for you to find coverage elsewhere.
Your insurance company can cancel your policy after a damage event. A homeowners insurance company can cancel your policy if you don’t pay your premiums or if you provide false information on your application.
If your insurance provider cancels your contract then it can be difficult for you to get a new contract with favorable terms. With all homeowners insurance applications, you will have to write to terminated the policy: you or the insurance provider. You must always give true information. The providers save data about policyholders and exchange information with each other. If an insurance provider sees that another company canceled your policy, it may reject your application or give you unfavorable terms. Therefore, you should ask your insurance provider for a reversal of cancelation so that you can cancel your policy instead of the insurance provider.
Can I Cancel My Homeowners Insurance?
Canceling Your Policy
For most companies, you can cancel your insurance policy three months before the end of the insurance year. You should always have an offer for a new contract before you cancel your old homeowners insurance.
Do I Legally Have To Buy Homeowners Insurance If I Own A Home?
Unlike health insurance, you do not legally have to buy homeowners insurance in Germany. However, most mortgage companies will require you to have homeowners insurance in order to get a loan. Nevertheless, if you own a home then you should buy homeowners insurance to protect your home in case of damage caused by unforeseen circumstances, such as fires or water leakage.
Who Wrote This?
My name is Bastian and I am a certified, independent insurance broker in Germany. My wife is American and together we help English-speaking expats figure out insurance, banking, and other issues encountered when moving to/living in Germany.
I also own Germany’s biggest Youtube-Channel about insurance knowledge and was honored with the “Education Award of the German Insurance Industry” in 2018 and became “Young Broker of the Year” in 2017.