Understanding contents insurance: what your cover really includes and how it can be optimised
18.06.25
6
Minutes
Katrin Straub
Managing Director at nextsure
A water leak can ruin your furniture, a burglary leaves chaos behind – contents insurance steps in. But what exactly does contents insurance cover, and how can you make sure your belongings are optimally protected? This article explains everything you need to know.
The topic in brief and concise terms
Contents insurance protects your movable property against fire, water damage, storm/hail, burglary, robbery and vandalism, usually at replacement value.
An appropriate sum insured (often €650 per square metre is recommended) is crucial to avoid underinsurance and reduced claims payments.
Additional modules such as natural hazard cover or bicycle insurance can individually and sensibly extend the basic cover.
Quick overview: Define the core benefits of contents insurance
Home contents insurance covers damage to all of your movable possessions. These include furniture, clothing, electrical appliances and valuables, up to certain compensation limits. In principle, damage caused by fire, mains water, storms from wind force eight, hail, burglary, robbery and vandalism after a break-in is covered. Many policies replace items that are damaged or stolen on a new-for-old basis, which means you receive money to purchase equivalent new items. Make sure you have an adequate sum insured; at least six hundred and fifty euros per square metre of living space is often recommended to avoid underinsurance. Home contents insurance is essential for every household.
Explained in practical terms: Understanding typical claims and cost coverage
Imagine a faulty television causing a fire in your living room. Household contents insurance covers the cost of the destroyed furnishings as well as consequential damage caused by smoke and extinguishing water. Another common scenario is a burst pipe that damages your carpet and furniture; here too, the insurance provides cover. In the event of a burglary, not only are stolen valuables replaced, but the cost of repairing the broken-in door or fitting a new lock is often also covered. It is important to note that simple theft without a break-in is often not covered. The insurance can also pay for hotel costs if your home becomes temporarily uninhabitable after a claim, often for up to one hundred days. Consider which situations your household contents insurance covers.
Here are some examples of costs that may be covered:
Clear-up costs after an insured event, for example up to five per cent of the sum insured.
Transport and storage costs if household contents need to be moved out, often for up to one hundred days.
Costs of changing locks after a burglary, usually up to five hundred euros.
Guarding costs for the insured property, if necessary.
Repair costs for damaged items or compensation at replacement value.
These examples show how even minor damage can quickly become a financial burden that good household contents insurance helps to absorb.
Sum insured and underinsurance: assessing risks correctly
The correct determination of the sum insured is crucial for full compensation. If the amount is set too low, underinsurance applies. In the event of a claim, the insurer will then reduce the benefit proportionally, even if the individual loss is below the sum insured. Example: your contents are worth ten thousand euros, but only five thousand euros are insured (fifty per cent underinsurance). For a loss of four thousand euros, you will receive only two thousand euros. Many insurers offer a waiver of underinsurance if you set the sum insured as a flat rate per square metre (e.g. six hundred and fifty euros). Check regularly whether your sum insured still corresponds to the current value of your contents, especially after major purchases. Tax deductibility of contents insurance is only possible to a very limited extent. A precise understanding of what contents insurance includes is essential here.
Expert knowledge: Getting to know VHB, clauses and important exclusions
The general household contents insurance conditions (VHB) form the legal basis of your contract. They define exactly which risks and losses are insured and which are not. As standard, losses caused by war events, nuclear energy or the deliberate causing of loss are often excluded. Losses caused by splash water, cleaning water or fungus are also often not covered. Natural hazards such as flooding, earthquakes or heavy rain usually require an additional module. Our expert tip: Read the VHB of your contract carefully and pay attention to clauses on valuables, bicycle theft or gross negligence. Cover for gross negligence is an important point. Valuables such as jewellery and cash are often insured only up to twenty per cent of the sum insured; cash sometimes only up to one thousand five hundred euros.
Important aspects in the VHB are often:
Definition of the insured location (flat, cellar, outbuilding).
Regulations on cover away from the home (protection for household contents outside the flat, e.g. on holiday).
Policyholder's obligations (duties of care, e.g. closing windows when away).
Compensation limits for specific items such as cash or jewellery.
Behaviour in the event of a claim (notification obligations, duty to mitigate loss).
Understanding these details helps you assert your claims correctly in the event of a loss and avoid surprises.
Additional modules: Expand individual protection in a targeted way
Basic home contents insurance provides solid core cover. However, there are useful optional add-ons to meet individual needs. Natural hazard insurance covers damage caused by natural events such as flooding, heavy rain, backwater, earthquakes, subsidence, landslides, snow pressure and avalanches – risks that are increasing in many regions. A bicycle clause also insures your bicycle against theft outside locked premises, often around the clock. Without this clause, the bicycle is usually only insured in the event of a break-in to the cellar or the flat. Glass insurance can be worthwhile if you have large glass surfaces (e.g. conservatory, ceramic hob), as these are often not included, or only covered to a limited extent, in standard home contents or buildings insurance. Our expert tip: Analyse your personal risk situation and the value of specific items to decide which add-ons offer you real added value. Also think about the difference compared with buildings insurance.
In the event of a claim: Proper conduct safeguards your claims
If a loss occurs, quick and correct action is important. Report the loss to your insurer immediately – usually within three days. Document the loss as thoroughly as possible with photos or videos and create a list of the damaged or stolen items (stolen property list) with purchase prices and dates. Only alter the scene of the loss if it is absolutely necessary to mitigate further damage (e.g. turn off the water). In the event of burglary or robbery, you must report it to the police immediately. Keep damaged items until the insurer has inspected them or given approval for disposal. Good documentation can significantly speed up claims settlement, often by as much as fifty per cent. Check whether burglary is covered by your insurance.
Checklist for the claim:
Report the loss to the insurer immediately (often within three days).
Photograph/film the scene of the loss.
Create a detailed list of the damaged/stolen items.
In the event of burglary/robbery: report it to the police immediately.
Do not throw anything away or have it repaired without consulting the insurer (except to mitigate further damage).
Keep invoices and receipts for damaged/stolen items to hand.
These steps help to keep the process running smoothly and ensure you receive the full benefit.
Your standard of living and household contents change over the years. Therefore it is important not just to take out your household contents insurance once, but to review it regularly – at least every two to three years. Have you bought expensive furniture, new home electronics or valuable jewellery? Then the sum insured may need to be adjusted to avoid underinsurance. A move is also a reason to review it; the new flat could be in a different risk zone or have a different size. Also compare the terms: sometimes newer tariffs offer better benefits or lower premiums for the same cover. Our expert tip: Use the service of your insurer or an independent adviser to check your policy for up-to-dateness and completeness. Combining household contents and buildings insurance can offer benefits. Also consider special cover such as commercial contents insurance, if relevant.
Request an individual risk analysis now: Have your insurance situation reviewed free of charge and receive specific suggestions for optimisation.
More useful links
Wikipedia provides a comprehensive overview of household contents insurance in Germany.
The German Insurance Association (GDV) provides statistics on claims trends in household contents insurance in Germany.
Statista offers detailed statistics on premiums and benefits in household contents insurance since the year 2000.
The Consumer Advice Centre provides information on the importance of the household contents value for the correct sum insured.
The German Insurance Association (GDV) provides the General Household Contents Insurance Conditions (VHB 2022) in the square-metre model.
The Federal Statistical Office (Destatis) offers comprehensive statistics on housing in Germany.
The Federal Office of Civil Protection and Disaster Assistance (BBK) provides important information on fire prevention and conduct in emergencies.
FAQ
What damage does contents insurance typically cover as standard?
By default, damage caused by fire (fire, lightning strike, explosion), water escaping from pipes (burst pipes), storm (from wind force 8) and hail, as well as burglary, robbery and vandalism following a break-in, is insured.
How high should the sum insured for my home contents insurance be?
A common recommendation is to assume at least six hundred and fifty euros per square metre of living space in order to avoid underinsurance. However, an accurate valuation of your household contents is always better.
Are damages outside my flat covered?
Yes, through the so-called outside cover. This provides temporary cover for your household contents when they are temporarily outside your home, e.g. while on holiday if your hotel room is broken into. The indemnity limits are often lower here.
What should be considered for valuables in household contents insurance?
Special compensation limits often apply to valuables such as jewellery, cash, documents or works of art, which are defined as a percentage of the insured sum or as fixed amounts. For cash, these are often only a few thousand euros.
Do I need separate natural hazards insurance?
Damage caused by natural events such as flooding, heavy rain, earthquakes or snow load is generally not included as standard in household contents insurance. A separate module, natural hazards insurance, is required for this.
What happens if I report a claim too late?
You are obliged to report a loss immediately (usually within a few days). A delayed report can lead to reductions in benefits or, in the worst case, release the insurer from its obligation to pay if this has made it more difficult to establish the loss or the obligation to provide benefits.
