Buildings insurance versus contents insurance: clear distinction for optimal protection for your home
21.06.25
11
Minutes
Katrin Straub
Managing Director at nextsure
A water damage incident devastates your kitchen – which insurance pays for 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 gaps in cover.
The topic in brief and concise terms
Buildings insurance protects the building and fixed fixtures; contents insurance covers movable belongings.
Both policies cover fire, escape of water and storm damage; the contents insurance also covers burglary and vandalism.
An accurate valuation and choosing suitable add-on cover (e.g. natural hazard cover) are crucial for comprehensive protection.
Understanding the basics: What both policies cover
Buildings insurance is responsible for damage to the building itself. It covers the masonry, roof and permanently installed items such as heating systems. Contents insurance, on the other hand, protects all movable items in your household. These include furniture, clothing and electronic devices. A simple test: everything that would fall out during a move belongs to the contents. This clear distinction is the first step towards your tailored cover.
Risks at a glance: Which hazards are covered?
Both policies often cover similar basic perils. These include fire, escape of water, storms of wind force eight and hail. Contents insurance also provides cover for burglary and vandalism. For example: a storm blows off your roof – a case for buildings insurance. If valuables are stolen in a burglary, contents insurance applies. Elemental damage such as flooding often requires an additional add-on for both policies. Many insurers offer this protection for just a few euros more per month. This add-on is particularly important in high-risk areas.
Case studies analysed: Who pays when?
Imagine a defective washing machine hose causes water damage. The damp furniture is replaced by the contents insurance. Damage to the soaked parquet floor is covered by the buildings insurance. Another example: a kitchen fire damages the fitted kitchen and leaves soot on the walls. The permanently installed fitted kitchen (if it is firmly connected to the building) and the walls fall under the buildings insurance. Movable kitchen utensils and freestanding appliances are the responsibility of the contents insurance. These examples show how important the correct classification is for a quick claims settlement, which can often be completed within 14 days.
Typical damage scenarios and responsibilities
To further illustrate the differences, here are some common claims cases:
An overturned tree damages the roof: buildings insurance.
Burglars steal your television and jewellery: contents insurance.
Water leaks out of a pipe and damages laminate flooring and carpet: buildings insurance for the laminate (if glued down), contents insurance for the carpet.
A lightning strike destroys electrical appliances: contents insurance (often with surge protection). The glass insurance can, depending on the cause and type of glass, either be part of the contents or buildings insurance, or be taken out separately.
Hail damages the façade and shutters: buildings insurance.
This distinction helps you know the right point of contact immediately in an emergency.
Optimise costs: contributions and influencing factors
The costs of both insurance policies vary considerably. For buildings insurance, the type of construction, age, location and size of the house play a role. A new build in a low-risk area is often cheaper to insure, sometimes by as much as fifty per cent. The sum insured for contents insurance is based on the value of the contents. A flat rate of 650 euros per square metre of living space is common here. A precise valuation avoids underinsurance and can save up to twenty per cent on the premium. Check whether a combination of both policies with one provider makes discounts possible. Many insurers offer package prices with discounts of up to ten per cent.
Deepen expert knowledge: clauses and pitfalls
Pay attention to important clauses such as waiver of underinsurance. This ensures that the insurer pays the full amount in the event of a partial loss, even if the household contents sum insured was set too low, often up to a limit of ten per cent. In cases of gross negligence, for example a burning candle, some tariffs only pay limited cover or none at all. Our expert tip: choose policies that explicitly waive the defence of gross negligence, at least up to a loss amount of EUR 10,000. This is an important aspect of the contents insurance in cases of gross negligence. For landlords, the question who pays for buildings insurance is clear: the owner, who can, however, pass on the costs. The obligation to have buildings insurance does not exist nationwide in Germany, but is often a requirement imposed by lenders.
Important aspects for optimal protection
Please note the following points for your insurance cover:
New-for-old compensation: Both policies should replace the replacement value, not just the current value.
Natural hazard cover: Check whether natural hazards insurance is necessary for risks such as flooding or heavy rain.
Outside the home cover: Contents insurance can also cover items outside the home, often for up to six months.
Bike theft: Bicycles are often covered only up to one per cent of the sum insured; an additional clause may be worthwhile.
Valuables: For jewellery, cash and works of art, compensation limits of twenty to forty per cent of the sum insured often apply.
A regular review of your policies, at least every three years, ensures that your cover remains up to date.
Special cases and distinctions: What is often overlooked
Fitted kitchens are a common point of contention. If the kitchen is individually adapted and permanently attached, it is usually covered by buildings insurance. Standard units that can be easily dismantled are more likely to fall under contents insurance. Photovoltaic systems on the roof are often covered by buildings insurance, though sometimes an additional add-on is required. Many people overlook the fact that damage to the building caused by tenants is not always covered by the landlord's buildings insurance. In such cases, landlord liability insurance or a deposit can help. The tax deductibility of contents insurance is only possible on a pro rata basis for a home office used for professional purposes. Buildings insurance for rented properties can be claimed as income-related expenses. These details can be crucial in the event of a claim and can mean savings of several hundred euros.
The difference between buildings insurance and contents insurance is clearly defined, but the devil is in the detail. A precise analysis of your personal situation and your property is essential. Only in this way can you ensure that your home, often worth several hundred thousand euros, is optimally protected. At nextsure, we help you find the right policies and close coverage gaps. Our experts take all relevant aspects into account, from the correct sum insured to sensible additional modules. Professional advice can not only give you peace of mind, but also save you money by avoiding unnecessary duplicate cover. Use our expertise for your tailored insurance cover.
Request an individual risk analysis now: Have your insurance situation checked free of charge and receive concrete suggestions for optimisation.
More useful links
GDV offers statistics on claims development for individual perils in the combined residential building insurance.
GDV provides data on claims expenditure in residential building insurance by peril (2003-2022).
Umweltbundesamt offers information on monitoring and financial aspects related to environmental topics.
GDV provides statistics on claims development for individual perils in the combined household contents insurance.
GDV presents data on lightning damage in household contents insurance.
FAQ
Does the buildings insurance also cover my garage?
Yes, as a rule, garages and carports on the insured property are also covered under buildings insurance. Outbuildings such as garden sheds can also be included, often up to a certain floor area.
What happens if my contents sum insured is too low?
If underinsurance applies, the insurer may reduce the benefit proportionally in the event of a claim. Many policies offer a waiver of underinsurance if the sum insured was calculated as a flat rate per square metre (e.g. EUR 650).
Does home contents insurance also pay out in the event of theft from a car?
Yes, under certain conditions. Many household contents insurance policies include cover away from home, which also covers theft from locked vehicles, although often with time and sum limits.
How quickly do I need to report a claim?
You should report a claim to your insurer immediately, usually within a few days. Document the damage as well as possible with photos and supporting documents.
Can I combine contents insurance and building insurance?
Yes, many insurers offer combined policies. This can simplify administration and sometimes lead to premium discounts of up to ten per cent.
What about permanently glued-down carpets?
Fully glued carpets are considered part of the building and are therefore covered by buildings insurance. Loose carpets, on the other hand, are counted as contents.
