Cancelling Building Insurance After Buying a House: Your Guide for 2025
28 May 2025
9
Minutes
Katrin Straub
CEO at nextsure
Have you bought a house and are wondering what happens to the existing building insurance? The good news: You are not bound by the old contract. Find out here how to exercise your right to special termination and avoid pitfalls.
The topic in brief and concise terms
As a homebuyer, you have a one-month special right of termination for the building insurance after the entry in the land register.
The termination must be in writing, and proof of ownership (land register excerpt) must be attached.
Carefully review old contracts and obtain comparison offers to save costs and optimize protection.
Quick Facts: The essentials of termination at a glance
When buying a house, the existing residential building insurance is initially transferred to you. However, you have a special right of termination within one month after the entry in the land register. The termination must be submitted in writing. If you miss this deadline, a regular termination is usually only possible at the end of the contract term. Be sure to inform yourself early about better offers.
Practice Section: How to optimally use your special termination rights
The devil is often in the detail, especially when it comes to cancelling the home insurance after a purchase. Imagine the Müller family buys a house. The land registry entry occurs on the 15th of May. The family then has until the 15th of June to cancel the existing, possibly expensive or incomplete policy of the previous owner. What’s crucial is that your cancellation letter reaches the insurer within these four weeks. If you send it late, you've missed your chance.
Here’s what you can do:
Examine the existing contract carefully: What services are included, what amounts are insured? Does it match your needs and the value of your new property? Often, old contracts are not up to date, especially regarding natural hazard coverage.
Obtain comparison offers: Use the time before and directly after the land registry entry to find suitable alternatives. Savings of several hundred euros per year are often possible.
Cancel in writing: Send the cancellation by registered mail with acknowledgment of receipt. Include a copy of the land registry extract as proof of your ownership, and thus your right to cancel.
Secure the new contract: First conclude the new home insurance, then cancel the old contract to ensure uninterrupted coverage.
A common scenario: The buyer learns of the existence of insurance only weeks after the land registry entry. In this case, the one-month cancellation period only starts from the point of awareness. This still gives you time to act, even if the original deadline after land registration has already passed. Also, consider who pays for the home insurance until the cancellation takes effect.
Expert Depth: Legal Foundations and Special Cases
The legal basis for the transfer and termination of building insurance is found in the Insurance Contract Act (VVG). § 95 VVG regulates the automatic transfer of the insurance contract to the acquirer. This serves to protect against insurance gaps. The special termination right, so important for buyers, is anchored in § 96 VVG. It gives you the freedom to act within one month after registration in the land register. The insurer also has this right.
Our expert tip: Pay attention to § 97 VVG. This paragraph obliges buyers and sellers to promptly notify the insurer of the change of ownership. If you as a buyer fail to report and a claim occurs after one month from registration in the land register, the insurer may be exempt from performance if not informed in time.
However, there are situations where the special termination right does not apply:
Inheritance or donation: Here, the contract is transferred, but there is no special right of termination. Termination is only possible regularly at the end of the contract.
Compulsory auction: In this case, as an acquirer, you have a special right of termination. However, the deadline begins with the bid at the auction, not with the registration in the land register.
Also check if the policyholder is not the owner, as this can occur in rare circumstances. For a smooth termination, you can use our sample letter for change of ownership. The question of whether you must have a building insurance is also relevant, although it is strongly recommended in most cases.
Premium shares and liability: Who pays what?
An important point is the payment of the insurance premium for the current insurance year. If the buyer assumes the contract, both the buyer and the seller are jointly liable to the insurer for the premium of the current insurance period. This means the insurer is free to decide from whom to demand the money. Typically, the purchase contract includes a provision on how these costs are shared internally – often proportionally according to the period of ownership. If the buyer cancels the contract, the seller is entitled to a refund of the overpaid premium from the insurer for the period after the cancellation becomes effective. This can take a few weeks.
Example: The seller has paid the annual premium of 600 euros in January. The sale, with land registry entry and cancellation by the buyer, becomes effective on 1st July. The seller would then receive around 300 euros back from the insurer. Ensure that all agreements regarding the distribution of premiums are documented in writing in the purchase contract. This prevents later disagreements. A good residential building insurance is invaluable, but the conditions must be right.
Preparation is everything: The checklist for changing insurance
A change in the building insurance after purchasing a house should be carefully planned to avoid pitfalls and ensure optimal protection. Here is a checklist with the most important steps:
Immediately after intention to purchase: Request and review the seller's existing insurance contract (scope of services, insurance sum, deductibles, duration).
Before land registry entry: Obtain at least three comparative offers for new building insurance. Pay attention not only to the price but also to the services that suit your new home.
Proof of ownership: As soon as the notary appointment has taken place and the application for registration in the land registry is filed, keep a copy of the land registry extract (or the notice of conveyance and purchase contract as preliminary evidence) ready.
Keep deadlines in sight: Note the one-month notice period after knowledge of the land registry entry.
Written cancellation: Prepare a cancellation letter (special termination right under § 96 VVG due to change of ownership), attach a copy of the land registry extract, and send by registered mail.
Sign new contract: Only sign the new insurance contract once the cancellation confirmation from the old insurer is received or in parallel, to avoid risking a coverage gap.
Inform the bank: If a mortgage is registered for a bank, it often requires a new insurance confirmation.
Inform the seller: Notify the seller of the cancellation so they can reclaim any outstanding premiums if necessary.
This careful preparation ensures that your new home is optimally protected from the first day and that you do not pay more than necessary for your building insurance. It is also wise to know the difference between building insurance and household contents insurance and to check if a combination of both insurances offers advantages with one provider.
nextsure: Your partner for optimal insurance coverage
Purchasing a property and the associated change in insurance can be complex. At nextsure, we understand that. Our mission is to offer you, as a digital insurance portal, tailor-made and easy-to-understand insurance solutions. We help you keep a clear overview and find the right home insurance for you – with optimal protection at fair conditions. This process often requires more than just an online comparison; a personalized assessment of your situation is usually indispensable.
Request an individual risk analysis now: Have your insurance situation checked free of charge and receive specific suggestions for optimization.
More useful links
Verbraucherzentrale provides helpful information on price increases and the proper termination of building insurance policies.
Verbraucherzentrale explains why building insurance is essential for homeowners.
Wikipedia offers a comprehensive overview of building insurance.
Gesetze im Internet presents the exact wording of § 96 of the Insurance Contract Act (VVG) regarding the termination of insurance contracts.
Gesetze im Internet contains the text of § 433 of the German Civil Code (BGB) related to the typical obligations in a sales contract.
Bundesfinanzministerium provides information about the real estate transfer tax.
FAQ
What documents do I need to cancel the home insurance after purchase?
You need a written termination letter invoking your special right of termination (§ 96 VVG) and a copy of the current land registry extract as proof of ownership.
Can the insurer also terminate the contract after purchasing the house?
Yes, the insurance company also has a special right of termination according to § 96 VVG within one month after becoming aware of the change of ownership.
Does the special right of termination also apply in the case of an inheritance?
No, there is no special termination right in case of an inheritance or gift. The contract can only be properly terminated at the end of its term.
What if I wasn't informed by the previous owner about an existing home insurance policy?
The one-month notice period only starts from the point at which you become aware of the insurance.
Should I resign first, or sign a new contract?
Always ensure that you secure a new, suitable insurance contract before cancelling the old one. This way, you can avoid dangerous gaps in coverage.
What happens to contributions already paid by the seller?
If you terminate the contract, the seller is entitled to a pro-rata refund of the premium from the insurer for the period after your termination becomes effective.
