Holiday rental insurance for landlords: Comprehensive protection for your property and income
31.03.25
11
Minutes
Katrin Straub
Managing Director at nextsure
Renting out your holiday apartment involves specific risks, from property damage to rental loss, which can often result in losses of over one million euros. Suitable insurance cover is therefore essential for every landlord. Find out how you can optimally protect your holiday property with the right policies.
The topic in brief and concise terms
A specialist holiday apartment insurance policy is essential for landlords, as standard policies often do not apply and damage can quickly amount to several thousand euros.
Key building blocks are buildings insurance, contents insurance and landlord liability insurance; loss of rent and legal expenses insurance provide useful additional cover.
Correctly stating the type of use (private/commercial) and any necessary change of use are crucial for full insurance cover.
Minimise risks: Essential protection for holiday apartment owners
The letting of a holiday apartment carries higher risks than long-term letting, often by as much as thirty per cent. Frequent guest turnover and vacant periods increase the risk of break-ins or undetected damage. Water damage can quickly result in costs of over 5,000 euros if it is not noticed promptly. Conventional private insurance policies often offer only inadequate protection for landlords here. A dedicated insurance for holiday apartments is therefore essential for every owner. These specialist policies take account of the particular conditions of use and protect you against typical hazards. This protects your assets, which often amount to several hundred thousand euros.
Identifying the key building blocks: These insurance policies are essential for landlords
For comprehensive protection of your holiday property, several insurance components are essential. The buildings insurance covers damage to the building itself, for example caused by fire, storm or burst pipes. Make sure that natural hazards such as flooding or earthquakes are also included; this can increase the premium by around ten to twenty per cent, but is often essential. Contents insurance protects the movable furnishings of your holiday apartment. Here, it is crucial whether you rent privately or commercially, as this affects the type of insurance; commercial policies often cover higher sums. A landlord liability insurance policy (often known as house and landowners’ liability insurance) is indispensable. It comes into play if third parties, for example your tenants, are injured on your property or in the house and make claims of up to three million euros. If you have a clearly commercial operation with several units, public liability insurance for businesses may become necessary to cover additional risks. The careful selection of these core components forms the foundation of your protection.
Optimising costs: understanding premiums for holiday let insurance
Costs for holiday apartment insurance for landlords vary widely and depend on various factors. These include the location (e.g. flood area), the size in square metres, the construction type and the quality of the furnishings. Buildings insurance for a holiday home with 100 square metres can cost between €200 and €800 per year. Contents/inventory insurance for a holiday apartment furnished to an average standard with 60 square metres could add a further €100 to €300 per year. Landlord liability insurance is often available from as little as €50 a year. By choosing an appropriate excess, for example €250 or €500 per claim, you can often reduce the annual premium by five to ten per cent. It is advisable to obtain at least three different quotes and compare the cover in detail. Some insurers offer combined packages that cover several risks and can therefore be cheaper than individual policies. Landlords can also claim certain insurance costs for tax purposes.
Implement supplementary cover: protect against rental loss and legal disputes
In addition to the basic insurance policies, two further policies can be very useful for landlords of holiday lets. A loss of rental income insurance protects you from financial losses if your holiday let cannot be rented out for several weeks or months, for example after an insured claim (e.g. fire, water damage). This insurance then covers the lost rental income, often for a period of up to twelve months. Check the terms carefully, because vacancies between regular bookings are usually not covered. A landlord legal expenses insurance policy is also an important addition. It covers the costs of solicitors and court proceedings if legal disputes arise with tenants, neighbours or authorities – a dispute value of EUR 5,000 can quickly lead to solicitor and court costs of over EUR 1,500. Such disputes can arise, for example, because of noise nuisance or unpaid tourist tax. Premiums for landlord legal expenses insurance start at around EUR 150 per year. These additional modules round off your insurance cover sensibly.
Make use of expert knowledge: avoid pitfalls and optimise insurance cover
To structure the insurance cover for your holiday apartment optimally, you should observe a few expert tips. A frequently overlooked point is the correct change of use of your property for holiday letting with the building authority. Without this approval, in the worst case your insurance cover may lapse, which can result in financial losses of tens of thousands of euros. When taking out the insurance, be sure to state the correct type of use (e.g. predominantly private use with occasional letting or purely commercial letting). Incorrect information can lead to refusal of payment in the event of a claim, even if only a small part was wrongly declared. Review your insurance cover at least every two years and adjust it if necessary, for example after renovations that increase the value of the property by more than ten per cent. Keep a detailed inventory list with photos and purchase receipts; this makes claims handling much easier and can reduce processing time by up to fifty per cent. Our expert tip: clarify with your insurer whether damage caused by gross negligence on your part or on the part of your guests is also covered up to an amount of, for example, €10,000. Observing these points will provide you with reliable long-term protection.
Special case online portals: understanding the specifics of Airbnb and similar platforms
Renting out via online portals such as Airbnb or Booking.com is popular, but it does come with insurance-specific particularities. Some platforms do offer their own protection programmes for hosts, such as Airbnb’s “Host Guarantee”, which can cover property damage up to one million US dollars. However, these programmes are often no substitute for your own comprehensive holiday apartment insurance for landlords. The terms of these platform guarantees often contain exclusions or provide for secondary liability, which means that your private insurance must pay first. In addition, they usually do not cover liability claims or loss of rental income. It is therefore essential that you tailor your own insurance cover, in particular the landlord liability insurance and contents insurance, to the specific risks of short-term letting. Check with your insurer whether renting out through such portals is explicitly covered and whether there are any restrictions, for example regarding the maximum rental period per year (often 60 to 90 days). Transparent communication with your insurer about your rental activities is crucial.
If damage occurs in your holiday apartment, acting quickly and correctly is crucial for a smooth settlement by your insurer. Document the damage immediately and as thoroughly as possible with photos or videos – at least five to ten shots are recommended. Report the damage to your insurer without delay, usually within a week. Carry out immediate measures to minimise the damage, for example turning off the water supply in the event of a burst pipe, to avoid further costs of several hundred euros. Keep damaged items until the matter has been clarified with the insurer, as they often need to be inspected. Create a list of all damaged or stolen items, including their replacement value and date of purchase; the inventory list created beforehand will help here. In the event of burglary or vandalism, file a report with the police immediately – the insurer will require a copy of the report. Our expert tip: keep the claim number you receive from the insurer to hand in all communications to speed up allocation and processing by up to thirty per cent. Good preparation and quick action in an emergency are worth their weight in gold.
Legal framework and obligations for landlords
As the landlord of a holiday apartment, you are subject to various statutory obligations, and failure to meet them can also have insurance-related consequences. This includes the duty of care: you must ensure that your property poses no danger to tenants or third parties, for example through loose stairs or unsecured areas. Compliance with fire safety regulations, such as the presence of functioning smoke alarms (at least one per floor), is required by law and is checked by insurers. In many municipalities, holiday guests are subject to a registration requirement. Failure to comply with the prohibition on repurposing, which applies in many cities with tight housing markets, can lead to fines of up to EUR 50,000 and jeopardise your insurance cover. Check with your local authority regarding local by-laws and building regulations. Buildings insurance is not legally required everywhere, but it is strongly recommended for every property owner. Knowing and complying with these framework conditions protects you from legal problems and safeguards your insurance cover.
Your next step towards optimal protection: personalised risk analysis
Insuring your holiday apartment is complex and requires a solution tailored to your individual situation. With a wide range of providers and tariffs, it is often difficult to keep track and find the right holiday apartment insurance as a landlord. Professional advice can help you avoid cover gaps and optimise premiums, often by up to fifteen per cent. At nextsure, we understand the specific needs of landlords of holiday properties. Our mission is to offer you tailored and easy-to-understand insurance solutions. Benefit from our expertise for your peace of mind. Request your individual risk analysis now: Have your insurance situation reviewed free of charge and receive concrete suggestions for improvement.
More useful links
German Tourism Association provides comprehensive information on holiday apartments.
IHK Munich provides important information on tenancy law for landlords.
Laws on the Internet provides direct access to laws and regulations, such as the Civil Code (BGB).
FAQ
Which insurance policies are mandatory for landlords of holiday apartments?
In Germany, there is no legally mandatory specific insurance for letting holiday apartments. However, buildings insurance is strongly recommended for every property owner and is often a prerequisite for financing. Landlord liability insurance is also essential to protect yourself against substantial claims for damages.
Does my private liability insurance cover the letting of my holiday apartment?
As a rule, not sufficient. Private liability insurance often only covers owner-occupied properties or excludes letting to holiday guests, or only includes it to a very limited extent. Separate landlord liability insurance (house and landowners’ liability insurance) is necessary. This often costs from EUR 50 per year.
What is the difference between contents insurance and inventory insurance for a holiday apartment?
Contents insurance is intended for holiday apartments used privately (and, where applicable, rented out occasionally). If the holiday apartment is rented out primarily on a commercial basis, commercial contents insurance (also known as contents cover) is necessary, as it often covers higher sums insured and specific commercial risks.
Are damages caused by guests’ vandalism covered by insurance?
Damage caused by vandalism may be covered by contents insurance or household contents insurance, provided this component is included. It is important to check the exact terms of your policy, as there are differences between providers. A deposit can cover initial damage.
What happens if my holiday apartment is left unoccupied for an extended period of time?
Longer periods of vacancy (often defined as more than 60 or 90 days) may be considered an increased risk and must be reported to the insurer. Otherwise, insurance cover may be jeopardised. Some insurers offer special tariffs for holiday properties that take vacancy periods into account.
Can I pass on the costs of the holiday apartment insurance to the tenants?
The costs for buildings insurance and landlords’ liability insurance can be allocated proportionately to tenants via service charges if this is agreed in the tenancy agreement. However, for holiday apartments with short-term letting, this is unusual and is usually already factored into the rental price. The costs of legal expenses insurance or loss-of-rent insurance are generally not chargeable to tenants.
