Understanding home contents insurance: What your protection really includes and how it can be optimized
18 Jun 2025
11
Minutes
Katrin Straub
CEO at nextsure
Water damage ruins your furniture, a break-in leaves chaos behind—the contents insurance steps in. But what exactly does contents insurance include, and how can you ensure your belongings are optimally protected? This article explains everything you need to know.
The topic in brief and concise terms
The household contents insurance protects your movable property against fire, tap water damage, storm/hail, burglary theft, robbery, and vandalism, usually at replacement value.
A correct insurance amount (often recommended at 650 euros/sq m) is crucial to avoid underinsurance and benefit reductions.
Additional components such as elemental protection or bicycle insurance can sensibly and individually extend the basic coverage.
Quick Overview: Defining the Core Benefits of Home Contents Insurance
The home contents insurance covers damage to all your movable property. This includes furniture, clothing, electrical appliances, and valuables up to certain compensation limits. Generally, damage caused by fire, water leaks, storms from wind force eight, hail, burglary, robbery, and vandalism following a break-in is covered. Many policies replace the new value of damaged or stolen items, meaning you receive money for the purchase of equivalent new items. Make sure you have an adequate sum insured; a minimum of six hundred and fifty euros per square meter of living space is often recommended to avoid underinsurance. The household insurance is essential for every household.
Practically explained: Understanding typical damage cases and cost coverage
Imagine a defective TV causes a fire in your living room. The contents insurance covers the costs of the destroyed furniture and any consequential damage caused by smoke and firefighting water. Another common scenario is a burst pipe damaging your carpet and furniture; the insurance covers this too. In the event of a burglary, not only are stolen valuables replaced, but often the costs for repairing the broken door or a new lock are covered. It is important to note that simple theft without a break-in is often not covered. The insurance may also cover hotel costs if your home is temporarily uninhabitable after damage, often for up to one hundred days. Consider which situations your contents insurance covers.
Here are some examples of costs that can be covered:
Cleanup costs after a damage event, for example, up to five percent of the sum insured.
Transport and storage costs if household items need to be relocated, often up to one hundred days.
Lock change costs after a burglary, typically up to five hundred euros.
Security costs for the insured home if necessary.
Repair costs for damaged items or compensation at new value.
These examples illustrate how quickly even minor damage can become a financial burden that good contents insurance can mitigate.
Sum insured and underinsurance: Correctly assessing risks
The correct determination of the insurance sum is crucial for full compensation of damages. If the sum is set too low, underinsurance exists. In case of damage, the insurer then reduces the benefit proportionally, even if the individual damage is below the insurance sum. Example: Your household contents are worth ten thousand euros, but only five thousand euros are insured (fifty percent underinsurance). In case of a four thousand euro damage, you will only receive two thousand euros. Many insurers offer an underinsurance waiver if you set the insurance sum on a flat-rate basis per square metre (e.g. six hundred and fifty euros). Regularly check whether your insurance sum still corresponds to the current value of your household contents, especially after major purchases. The tax deductibility of household insurance is very limited. Precise knowledge of what the household insurance includes is essential here.
Expert Knowledge: Learn about VHB, Clauses, and Important Exclusions
The General Household Insurance Conditions (VHB) form the legal basis of your contract. They precisely define which risks and damages are insured and which are not. Damage caused by events of war, nuclear energy, or intentional damage are often excluded by default. Damage from splash or cleaning water or from fungus is often not covered either. Natural hazards such as flooding, earthquakes or heavy rain usually require an additional component. Our expert tip: Read your contract's VHB carefully and pay attention to clauses regarding valuables, bicycle theft, or gross negligence. Insurance for gross negligence is an important point. Valuables like jewellery and cash are often insured only up to twenty percent of the insurance sum, cash sometimes only up to one thousand five hundred euros.
Important aspects in the VHB often include:
Definition of the insured location (apartment, basement, outbuildings).
Regulations for external insurance (coverage for household contents outside the apartment, e.g., on holiday).
The policyholder's obligations (duties of care, e.g., closing windows when absent).
Compensation limits for specific items like cash or jewellery.
Behaviour in the event of a claim (reporting obligations, duty to minimise loss).
Understanding these details helps you assert your claims correctly in an emergency and avoid surprises.
Additional Modules: Expand Personalised Protection Intentionally
The basic household insurance offers solid basic protection. However, for individual needs, there are useful additional modules available. Natural disaster insurance covers damages caused by natural events such as flooding, heavy rain, backwater, earthquakes, soil subsidence, landslides, snow pressure and avalanches – risks that are increasing in many regions. A bicycle clause protects your bike against theft outside of locked rooms, often around the clock. Without this clause, the bicycle is usually only insured in the event of a break-in into the basement or apartment. Glass insurance can be wise if you have large glass surfaces (e.g. conservatory, ceramic hob) since these are often not or only partially included in the regular household or residential building insurance. Our expert tip: Analyse your personal risk situation and the value of special items to decide which additional modules provide genuine added value for you. Also, consider the difference to residential building insurance.
Claim: Correct behaviour secures your rights
In the event of damage, swift and accurate action is crucial. Report the damage to your insurer immediately– usually within three days. Document the damage as thoroughly as possible with photos or videos and compile a list of damaged or stolen items (an inventory of losses) with purchase prices and dates. Only alter the site of damage if absolutely necessary to mitigate further damage (e.g., turning off water). In cases of burglary or robbery, you must report it to the police straight away. Retain damaged items until your insurer has inspected them or you have been cleared to dispose of them. Good documentation can significantly speed up the claims process, often by up to fifty percent. Check whether a burglary is covered by your insurance.
Checklist for Claim Events:
Report the damage to the insurer immediately (often within three days).
Photograph or film the site of damage.
Create a detailed list of damaged/stolen items.
In case of burglary/robbery: Immediately report to the police.
Do not discard or repair anything without consulting the insurer (except for damage mitigation).
Keep invoices and receipts for damaged/stolen items ready.
These steps help ensure a smooth process and full compensation.
Optimisation potential: Regularly review and adjust insurance coverage
Your standard of living and household goods change over the years. Therefore, it's important not just to take out your household insurance once but to review it regularly – at least every two to three years. Have you purchased expensive furniture, new home electronics, or valuable jewellery? Then the insurance sum may need to be adjusted to avoid underinsurance. A move is also an occasion for review; the new apartment may have a different risk zone or size. Also, compare the conditions: sometimes newer tariffs offer better services or lower premiums for the same protection. Our expert tip: Use the service of your insurer or an independent advisor to check your contract for current relevance and completeness. A combination of household and building insurance can bring advantages. Also, consider special coverages like commercial contents insurance if applicable.
Request an individual risk analysis now: Have your insurance situation examined free of charge and receive concrete suggestions for optimisation.
More useful links
Wikipedia provides a comprehensive overview of household insurance in Germany.
The German Insurance Association (GDV) offers statistics on the development of claims in household insurance in Germany.
Statista provides detailed statistics on contributions and benefits in household insurance since the year 2000.
The Consumer Advice Centre provides information on the importance of household value for the correct insurance sum.
The German Insurance Association (GDV) provides the General Household Insurance Conditions (VHB 2022) in the square meter 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 behaviour in emergency situations.
FAQ
What damages are typically covered by home contents insurance?
By default, damage caused by fire (including fire, lightning, explosion), pipe water (pipe burst), storm (from wind force 8), and hail, as well as burglary, robbery, and vandalism following a break-in, are insured.
What should the coverage amount of my household insurance be?
A common recommendation is to set at least six hundred and fifty euros per square metre of living space to avoid underinsurance. However, it is always better to have an accurate valuation of your household contents.
Are damages outside my apartment insured?
Yes, through what is known as external insurance. This provides temporary protection for your household contents when they are temporarily outside your home, such as during a holiday if there is a break-in at your hotel room. The compensation limits are often lower in this case.
What should be considered regarding valuables in home insurance?
For valuables like jewellery, cash, documents, or artworks, there are often specific compensation limits defined as a percentage of the insured amount or as fixed amounts. For cash, it is often only a few thousand euros.
Do I need a separate natural disaster insurance?
Damage caused by natural events such as flooding, heavy rainfall, earthquakes, or snow pressure is generally not included as standard in home insurance. A separate component, the natural hazard insurance, is necessary for this.
What happens if I report damage too late?
You have the duty to report a damage immediately (usually within a few days). A delayed report may lead to reductions in benefits or, in the worst case, to the insurer being released from their obligation to pay if this has made it more difficult to determine the damage or the obligation to perform.
