Building insurance vs. home contents insurance: Clear distinction for optimal protection of your home
21 Jun 2025
12
Minutes
Katrin Straub
CEO at nextsure
Water damage devastates your kitchen – which insurance covers what? The difference between buildings insurance and contents insurance is often crucial for a quick and complete settlement. This article explains the details and helps you avoid coverage gaps.
The topic in brief and concise terms
The residential building insurance protects the building and permanent fixtures; the home contents insurance covers movable inventory.
Both insurances cover fire, water damage, and storm; the contents insurance additionally covers burglary and vandalism.
An accurate valuation and the choice of suitable additional components (e.g. elemental protection) are crucial for comprehensive coverage.
Understanding the basics: What both policies provide
The residential building insurance is responsible for damage to the building itself. It covers the masonry, roof, and permanently installed objects like heating systems. The contents insurance, on the other hand, protects all movable items in your household. This includes furniture, clothing, and electronic devices. A simple test: Everything that falls out during a move belongs to the contents insurance. This clear separation is the first step to your tailored protection.
Keeping an eye on risks: What dangers are covered?
Both insurances often cover similar basic hazards. These include fire, water damage, storms starting from wind force eight, and hail. The contents insurance additionally offers protection against burglary and vandalism. For example: A storm uncovers your roof - a case for the building insurance. If valuables are stolen during a burglary, the contents insurance comes into play. Natural hazard damages such as flooding often require an additional component for both policies. Many insurers offer this protection for just a few extra pounds per month. This addition is particularly important in high-risk areas.
Case studies analysed: Who pays when?
Imagine a faulty washing machine hose causing water damage. The home contents insurance replaces the soaked furniture. Damage to the soaked parquet flooring is covered by the building insurance. Another example: A kitchen fire damages the fitted kitchen and blackens the walls. The permanently installed fitted kitchen (if firmly attached to the building) and the walls fall under the building insurance. Movable kitchen utensils and freestanding devices are covered by the home contents insurance. These examples show how important correct assignment is for quick claims settlement, which can often occur within 14 days.
Typical damage scenarios and responsibilities
To further clarify the differences, here are some common damage cases:
A fallen tree damages the roof: building insurance.
Burglar steals your television and jewellery: home contents insurance.
Water escapes and damages laminate and carpet: building insurance for the laminate (if adhered), home contents insurance for the carpet.
A lightning strike destroys electronic devices: home contents insurance (often with surge protection). The glass insurance can, depending on the cause and type of glass, be part of either the home contents or building insurance or be taken out separately.
Hail damages the facade and shutters: building insurance.
This delineation helps you know the right contact in the event of a claim.
Optimising Costs: Contributions and Influencing Factors
The costs of both insurances vary greatly. For home insurance, factors such as construction type, age, location, and the size of the house play a role. A new build in a low-risk zone is often cheaper to insure, sometimes by up to fifty percent. The sum insured for home contents insurance is based on the value of the household contents. Typically, this is a flat rate of 650 euros per square meter of living space. Accurate valuation avoids underinsurance and can save up to twenty percent on contributions. Check whether a combination of both insurances with one provider enables discounts. Many insurers offer package prices with discounts of up to ten percent.
Deepen expert knowledge: Clauses and pitfalls
Pay attention to important clauses such as the underinsurance waiver. This ensures that the insurer pays the full amount in the event of partial damage, even if the household value was underestimated, often up to a limit of ten percent. In cases of gross negligence, such as a burning candle, some policies provide limited or no coverage. Our expert tip: Choose policies that explicitly waive the defence of gross negligence, at least up to a claim amount of 10,000 euros. This is an important aspect of the home contents insurance in case of gross negligence. For landlords, the question of who pays for the building insurance is clear: the owner, who can pass on the costs. The obligation to have building insurance does not exist nationwide in Germany, but it is often a requirement by banks for borrowers.
Important Aspects for Optimal Protection
Consider the following points for your insurance cover:
Replacement value compensation: Both insurances should cover the replacement value, not just the current value.
Elemental protection: Assess the necessity of natural disaster insurance for risks such as floods or heavy rain.
External insurance: The home contents insurance can also cover items outside the home, often for up to six months.
Bicycle theft: Bicycles are often only insured up to one percent of the insured amount; an additional clause might be advisable.
Valuables: Compensation limits for jewellery, cash, and art are often between twenty and forty percent of the insured amount.
Regularly reviewing your policies, at least every three years, ensures that your coverage remains up-to-date.
Special cases and distinctions: What is often overlooked
Fitted kitchens are a common point of contention. If the kitchen is custom-fitted and permanently attached, it usually falls under the building insurance policy. Standard modules that are easily dismantled are more likely to be considered household contents. Photovoltaic systems on the roof are often covered by the building insurance, although a supplementary component may sometimes be necessary. Many overlook that damage caused by tenants to the building is not always covered by the landlord's building insurance. Here, landlord liability or a deposit can help. The tax deductibility of household contents insurance is only partially possible for a professionally used home office. Building insurance for rented properties can be deducted as advertising expenses. These details can be crucial in the event of a claim and could mean a saving of several hundred euros.
Your path to comprehensive protection: Make use of our advice
The difference between building insurance and contents insurance is well-defined, but the devil is in the details. A detailed analysis of your personal situation and property is essential. Only then can you ensure your home, often worth several hundred thousand euros, is optimally protected. At nextsure, we help you find the right tariffs and close coverage gaps. Our experts consider all relevant aspects, from the correct insurance sum to sensible additional components. Professional advice can not only provide you with security but also save you real money by avoiding unnecessary double insurance. Use our expertise for your personalised insurance coverage.
Request an individual risk analysis now: Have your insurance status checked for free and receive specific optimisation suggestions.
More useful links
GDV provides statistics on the claims development for individual risks in the combined residential building insurance.
GDV offers data on the claims expenditure of residential building insurance by risks (2003-2022).
Umweltbundesamt provides information on monitoring and financial aspects related to environmental issues.
GDV supplies statistics on the claims development for individual risks in the combined contents insurance.
GDV presents data on lightning damages in the contents insurance.
FAQ
Does the home insurance also cover my garage?
Yes, as a rule, garages and carports on the insured property are covered by the building insurance. Outbuildings such as garden sheds can also be included, often up to a certain number of square metres.
What happens if my sum insured in the household contents is too low?
In the case of underinsurance, the insurer may reduce the payout proportionately in the event of a claim. Many policies offer an underinsurance waiver if the sum insured has been calculated as a flat rate per square metre (e.g., 650 euros).
Does the contents insurance also cover theft from the car?
Under certain conditions, yes. Many household insurance policies include external coverage that also covers theft from locked motor vehicles, although often with time and amount limitations.
How quickly do I need to report damage?
You should report a claim to your insurer without delay, usually within a few days. Document the damage as thoroughly as possible with photos and receipts.
Can I combine household contents and building insurance?
Yes, many insurers offer combination policies. This can simplify administration and sometimes lead to premium discounts of up to ten percent.
What about permanently bonded carpets?
Firmly glued carpets are considered part of the building structure and are therefore covered by the residential building insurance. Loose carpets, on the other hand, are classified as household contents.
