Cancelling buildings insurance after buying a house: your guide for 2025
28.05.25
5
Minutes
Katrin Straub
Managing Director at nextsure
You have bought a house and are wondering what happens to the existing buildings insurance? The good news: you are not bound by the previous contract. Find out here how to use your special right of cancellation and avoid pitfalls.
The topic in brief and concise terms
As a house buyer, you have a one-month special right of termination for the buildings insurance after entry in the land register.
The notice of termination must be submitted in writing, and proof of ownership (land register extract) must be enclosed.
Review existing contracts carefully and obtain comparison quotes to save costs and optimise cover.
Quick Facts: The most important information about cancellation at a glance
When buying a house, the existing residential building insurance initially transfers to you. However, you have a one-month special right of cancellation after the land register entry. The cancellation must be made in writing. If you miss this deadline, ordinary cancellation is usually only possible at the end of the term. Find out about better offers in good time.
Practical section: How to make the most of your special right of cancellation
The devil is often in the detail, especially when it comes to cancelling buildings insurance after a purchase. Imagine the Müller family buys a house. The entry in the land register is made on 15 May. The family now has until 15 June to cancel the existing, possibly expensive or inadequate policy of the previous owner. The key is that your cancellation letter must reach the insurer within these four weeks. Sending it too late, and the opportunity is lost.
Here is how to proceed in practice:
Check the existing contract carefully: Which benefits are included, which sums insured? Does this suit your needs and the value of your new property? Older policies are often not up to date, especially when it comes to natural hazards.
Obtain comparison quotes: Use the time before and immediately after the land register entry to find suitable alternatives. Savings of several hundred euros per year are often possible.
Cancel in writing: Send the cancellation by recorded delivery with proof of receipt. Enclose a copy of the land register extract as evidence of your ownership and therefore your entitlement to cancel.
Secure the new contract: Only take out the new buildings insurance, and then cancel the old policy to ensure seamless cover.
A common case: The buyer only learns about the existence of an insurance policy weeks after the land register entry. In this scenario, the one-month cancellation period only begins from the moment you become aware of it. This still gives you room to act even if the actual period after the land register entry has already expired. Also note who pays the buildings insurance until the cancellation takes effect.
Expert depth: Legal foundations and special cases
The legal basis for the transfer and termination of buildings insurance is found in the Insurance Contract Act (VVG). Section 95 VVG governs the automatic transfer of the insurance contract to the purchaser. This serves to protect against gaps in cover. The special right of termination, so important for buyers, is enshrined in Section 96 VVG. It gives you the freedom to act within one month of entry in the land register. The insurer also has this right.
Our expert tip: pay attention to Section 97 VVG. This section requires buyers and sellers to notify the insurer of the change of ownership without delay. If, as the buyer, you fail to report it and a loss occurs after the expiry of one month following entry in the land register, the insurer may be released from liability if it was not informed in good time.
However, there are situations in which the special right of termination does not apply:
Inheritance or gift: the contract does transfer, but there is no special right of termination. Termination is only possible in the ordinary way at the end of the contract term.
Enforcement sale: in this case, as the purchaser you have a special right of termination. However, the time limit begins with the hammer fall at the auction, not only with the entry in the land register.
Also check whether the policyholder is not the owner; this can occur in rare cases. For a smooth cancellation you can use our sample letter for a change of ownership. The question of whether you need buildings insurance is also relevant, even though it is strongly recommended in most cases.
Premium shares and liability: who pays what?
One important point is the payment of the insurance premium for the current insurance year. If the buyer takes over the contract, buyer and seller are jointly and severally liable to the insurer for the premium for the current insurance period. This means the insurer can choose from whom it demands the money. Usually, the purchase contract sets out how these costs are to be allocated internally – often in proportion to the period of ownership. If the buyer terminates the contract, the seller is entitled to a refund from the insurer of any premium paid in excess for the period after the termination takes effect. This can take a few weeks.
Example: The seller paid the annual premium of 600 euros in January. The sale, with entry in the land register and termination by the buyer, takes effect on 1 July. The seller would then receive around 300 euros back from the insurer. Be sure to record all agreements on how the premium is to be split in writing in the purchase contract. This avoids later disputes. Good buildings insurance is worth its weight in gold, but the terms have to be right.
Preparation is everything: The checklist for switching insurance
Changing buildings insurance after buying a house should be carefully planned to avoid pitfalls and ensure optimal protection. Here is a checklist with the most important steps:
Immediately after deciding to buy: Request and review the seller’s existing insurance policy (scope of cover, sum insured, excess, term).
Before the land register entry: Obtain at least three comparison quotes for a new buildings insurance policy. Pay attention not only to the price, but also to the benefits that suit your new home.
Proof of ownership: As soon as the notary appointment has taken place and the application to transfer the land register entry has been submitted, keep a copy of the land register extract (or the priority notice of conveyance and the purchase contract as provisional proof) to hand.
Keep an eye on deadlines: Make a note of the one-month notice period after becoming aware of the land register entry.
Written cancellation: Prepare the cancellation letter (special right of cancellation under Section 96 VVG due to a change of ownership), enclose a copy of the land register extract and send it by registered post.
Take out the new contract: Only sign the new insurance contract once the cancellation confirmation from the old insurer has been received, or do so in parallel, so as not to risk a gap in cover.
Inform the bank: If a land charge is registered in favour of a bank, it often requires a new insurance confirmation.
Inform the seller: Let the seller know about the cancellation so that they can, if necessary, reclaim any prorated premiums.
This careful preparation ensures that your new home is as well protected as possible from day one and that you do not pay more than necessary for your buildings insurance. It is also advisable to know the difference between buildings insurance and contents insurance and to check whether a combination of both insurance policies with one provider offers advantages.
nextsure: Your partner for optimal insurance cover
The purchase of a property and the associated change of insurance can be complex. At nextsure, we understand that. Our mission is to offer you tailored and easy-to-understand insurance solutions as a digital insurance portal. We help you keep a clear overview and find the buildings insurance that is right for you – with optimum cover on fair terms. This process often requires more than just an online comparison; an individual assessment of your situation is usually essential.
Request an individual risk analysis now: Have your insurance situation reviewed free of charge and receive specific optimisation suggestions.
More useful links
Consumer Advice Centre offers helpful information on price increases and the correct cancellation of buildings insurance policies.
Consumer Advice Centre explains why buildings insurance is essential for homeowners.
Wikipedia provides a comprehensive overview of buildings insurance.
Laws on the Internet provides the exact wording of Section 96 of the Insurance Contract Act (VVG) on cancelling insurance contracts.
Laws on the Internet contains the text of Section 433 of the German Civil Code (BGB) on the typical obligations in a purchase contract.
Federal Ministry of Finance provides information about property transfer tax.
FAQ
What documents do I need to cancel the residential building insurance after the purchase?
You need a written notice of termination citing your special right of termination (§ 96 VVG) and a copy of the current land register extract as proof of your ownership.
Can the insurer also terminate the contract after buying the house?
Yes, the insurance company also has a special right of cancellation under Section 96 VVG within one month of becoming aware of the change of ownership.
Does the special right of termination also apply in the event of inheritance?
No, in the event of an inheritance or a gift, there is no special right of termination. The contract can only be terminated ordinarily at the end of the term.
What if I was not informed by the previous owner about an existing residential building insurance policy?
The one-month notice period only starts once you become aware of the insurance.
Should I first give notice or sign a new contract?
Always first take out a new, suitable insurance policy before cancelling the old one. This will help you avoid dangerous gaps in cover.
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 cancellation takes effect.
