Protection for owners

Buildings insurance: what happens when the house is no longer standing?

Without it, a property is not an asset

Fire, escaping water, storm — and the gap 43 percent of owners have
Why the sliding new-value basis matters more than the build cost
99 percent of buildings in Germany can be insured against natural hazards

45 minutes · free · no obligation · in English

In short

Who needs buildings insurance in Germany?

Anyone who owns a house or an apartment. For tenants it is irrelevant — the owner pays it, and for apartments the owners’ association does, through the service charge.

Insured is the building itself and everything permanently installed: walls, roof, heating, sanitary installations, fixed flooring. Standard cover comprises fire, escaping water, storm and hail. In a total loss it pays for rebuilding — for most families the single largest asset they hold.

Not automatically included are natural hazards: heavy rain, flooding, backflow, landslide, snow pressure. At the end of 2024, according to the German Insurance Association, only 57 percent of residential buildings had this cover — up from 41 percent in 2017. At the same time 99 percent of all buildings in Germany are insurable. The gap therefore does not arise from what is on offer.

Try it yourself

Basic cover or with natural hazards? The difference in five perils

On the left the perils that can hit a building. On the right you switch between the two levels of cover — and watch which ticks disappear.

What can hit a building

The ticks change with the level of cover you pick on the right.

Fire Fire, lightning strike, explosion.
Escaping water Burst pipes, water escaping from pipework and connected appliances.
Storm and hail From force 8 — tiles torn off, windows destroyed.
Heavy rain and flooding Water running into the building from outside because the volume cannot drain away.
Backflow from the sewer Water pushed back through the pipes into the house — the flooded basement.

Basic buildings insurance With natural-hazard cover

Basic buildings insurance

What almost every standard contract contains

3 of 5 met

Covers the three classic perils — and stops exactly where losses are increasing.

Fire: Core component of every buildings policy.
Escaping water: Core component. Check drainage pipes on the plot — they are not included everywhere.
Storm and hail: 96 percent of residential buildings in Germany are insured against storm and hail.
Heavy rain and flooding: Not included. Water coming from outside is a natural-hazard claim, not an escaping-water claim.
Backflow from the sewer: Not included. The flooded basement after heavy rain falls into this gap.

Storm/hail coverage rate: GDV, data service for the natural hazards report, end of 2024.

With natural-hazard cover

The component 43 percent do not have

5 of 5 met

Closes precisely the gap that is growing fastest in the loss statistics — and is available for 99 percent of buildings in Germany.

Fire: As in basic cover.
Escaping water: As in basic cover.
Storm and hail: As in basic cover.
Heavy rain and flooding: Included. In 2025 natural hazards such as heavy rain, flooding and backflow caused around €400 million in insured losses.
Backflow from the sewer: Included — usually on condition that a functioning backflow valve is installed.

GDV natural hazards balance 2025 and data service. At the end of 2024, 57 percent of residential buildings had natural-hazard cover; 99 percent are insurable.

Basic cover is not wrong — it is incomplete. And the gap sits precisely with the perils that are increasing in the loss statistics.

Do you know which hazard zone your house is in?

Insurers divide Germany into hazard classes, and that determines whether and at what premium you can get natural-hazard cover. We look it up for your address in the clarity call.

Book your free clarity call

What matters

How do you spot good buildings insurance?

With buildings insurance the sums are large enough that a mistake can no longer be corrected afterwards.

The sliding new-value basis

It keeps the sum insured growing with building costs — and protects you from underinsurance.

A house built in 1995 for €250,000 cannot be rebuilt today for €250,000. That is precisely the problem the sliding new-value basis solves.

How it works

Instead of a fixed sum, what is agreed is the so-called 1914 value — a notional figure in 1914 marks. Each year it is multiplied by an officially published building cost index. The sum insured therefore rises automatically with construction costs, and so does the premium.

Why that is good even though the premium rises

Without this adjustment you would be underinsured after ten years without noticing, and the insurer could reduce the payout proportionally. The rising premium is the price of cover that keeps pace with reality.

Natural-hazard cover is a separate component

The flooded basement after heavy rain is not an escaping-water claim — and is not covered without the add-on.

The distinction sounds pedantic and decides five-figure sums: escaping water is water that leaves the pipework of the house. A natural-hazard loss is water coming from outside — through heavy rain, down the basement steps, or pushed back through the sewer into the house.

The figures

In 2025 natural hazards caused around €1.4 billion in insured losses in property insurance. About one billion was storm and hail, roughly €400 million natural hazards such as heavy rain, flooding and backflow.

And the most common misconception

“We do not live by a river.” Heavy rain does not need a river. It hits anywhere the drainage system cannot take the volume of water — on a slope and in the city centre alike.

Source: GDV natural hazards balance 2025.

Backflow valves and policy duties

Some benefits depend on your having taken specific precautions.

Insurance contracts contain duties (Obliegenheiten) — obligations whose breach can cost you the payout. For buildings insurance these typically are:

A functioning backflow valve where rooms lie below the backflow level. Without it the insurer can reject the basement claim.
Heating and checking the building during the cold season so pipes do not burst — relevant during longer absences.
Shutting off the water supply when the property stands empty.

These are not footnotes in the small print but the most common reasons for reduced payouts. Knowing them means you can meet them.

What is not covered

The contents, the land, and damage you cause to others.

Buildings insurance covers the building. Everything movable inside is a matter for contents insurance — the two complement each other and do not overlap.

Also not included

Damage through wear and tear, ageing and deferred maintenance
Damage that originates from your house and affects others — that requires property owner’s liability, which for owner-occupied homes is often already part of personal liability cover
Solar panels and outbuildings, unless expressly included

The last point is often overlooked: if you retrofit a system on the roof, tell the insurer.

Common questions about buildings insurance

Is buildings insurance compulsory in Germany?

Not by law. In practice, effectively yes: almost every bank requires it as a condition of financing, because the building is the security for the loan. For apartments the owners’ association takes it out and the cost runs through the service charge.

Do I need natural-hazard cover if I do not live by a river?

Very probably yes. Heavy rain is the most common natural-hazard loss and hits places with no water nearby — anywhere the drainage system cannot take the volume. According to the GDV, 99 percent of buildings in Germany are insurable; the gap is on the demand side, not the supply side.

Why does my premium rise every year?

Because the sum insured rises with it. Under the sliding new-value basis the 1914 value is multiplied annually by the official building cost index — as construction costs rise, so does the cover and with it the premium. It is not a price increase in the usual sense but protection against being underinsured when you claim.

What is the difference between buildings and contents insurance?

Permanently installed versus movable. Walls, roof, heating and fixed flooring belong to the building. Furniture, clothing, electronics and rugs are contents. A fitted kitchen is the classic borderline case and is handled differently in the two policies — worth clarifying once.

Does the policy pay while the house stands empty?

With restrictions. Vacancy must be reported to the insurer, and stricter duties apply: regular inspection, heating in winter, often shutting off the water supply. Fail to comply and you risk the payout — especially for escaping-water claims.

Are my solar panels covered?

Only if expressly included. For a retrofitted system you must notify the insurer. Some tariffs cover it automatically up to a certain output, others not at all — worth reading the terms before the storm, not after.

Context

This page is general information and does not replace advice tailored to your situation. What a specific tariff actually covers is set out in its terms and conditions — the differences between two offers carrying the same name are considerable. Figures and rates quoted are market values as of the stated date and are not a commitment.

ETF4Kids is a licensed insurance broker under § 34d of the German Trade Regulation Act, supervised by the Chamber of Commerce (IHK) Region Stuttgart. As a broker we are legally obliged to advise in our clients’ interest. We are neither legal nor tax advisers; where a question belongs there, we say so.

Your house, your address, your policy

Hazard zone, natural-hazard cover, sliding new-value basis, policy duties — we go through them for your specific property in the clarity call. 45 minutes, free, in English.

Book your free clarity call