Buildings insurance on a change of ownership: your guide to a seamless transition including a sample letter
07.05.25
11
Minutes
Katrin Straub
Managing Director at nextsure
Buying a house is exciting, but what happens to the buildings insurance? Find out how to avoid insurance gaps and make the most of your rights as the new owner.
The topic in brief and concise terms
When a house is purchased, the buildings insurance automatically transfers to the buyer; however, the buyer has a special right to cancel within one month after entry in the land register.
Both the seller and the buyer must inform the insurer about the change of ownership; a sample letter can make it easier for the buyer to cancel.
In the event of inheritance, there is no special right of termination for the buildings insurance; in the case of a compulsory auction, it does not transfer automatically.
Quick Facts: The key points on the insurance transfer at a glance
On the purchase of a house, the existing residential building insurance automatically transfers to the buyer in accordance with Section 95 of the Insurance Contract Act (VVG). This transfer takes place when the new owner is entered in the land register, not already at the notarial appointment. The buyer has a special right of cancellation for one month after entry in the land register. Seller and buyer are obliged to notify the insurer of the change of ownership without delay. For the premium for the current insurance period, seller and purchaser are often jointly and severally liable. These provisions ensure uninterrupted insurance cover for the property throughout the entire transfer process.
Practical guide: How to act correctly when ownership changes
A change of ownership of a property requires both the buyer and the seller to pay close attention to the buildings insurance. The seller must inform the buyer about the existing policy and hand over all documents. Both parties, buyer and seller, can notify the insurer of the sale; a copy of the land register extract serves as proof. For the new owner, the one-month period for the special right of termination begins with the entry in the land register or once the insurer has been notified. Here is an example of a template letter for cancelling buildings insurance after a change of ownership:
Max Mustermann
Sample Street 1
12345 Sample Town
Insurance Company XY
Insurance Avenue 2
54321 Insurance City
Sample Town, DD.MM.YYYY
Subject: Special termination of buildings insurance no. [] due to change of ownership – Property: []
Dear Sir or Madam,
I hereby exercise my special right of termination under Section 96 VVG and cancel the above-mentioned buildings insurance for the property [] due to the change of ownership.
The change of ownership was entered in the land register on []. A copy of the current land register extract is enclosed with this letter.
Please confirm cancellation in writing, stating the termination date.
Yours sincerely
[]
Max Mustermann
It is important to send the cancellation by recorded delivery so that you have proof. The cancellation can take effect immediately or at the end of the current insurance period. It is advisable to review carefully whether the existing contract meets your own needs before cancelling. The protection for your new home should be the top priority.
Expert knowledge: Legal nuances and optimisation potential
The German Insurance Contract Act (VVG) provides the legal basis for the transfer of residential building insurance. Section 95 VVG regulates the automatic transfer of the contract to the purchaser. Section 96 VVG grants the purchaser a special right of termination. This right applies for one month from entry in the land register or from the point at which the new owner becomes aware of the insurance. Our expert tip: check the existing scope of cover carefully. Older policies often no longer meet current needs, or there may be more affordable offers with better benefits. Comprehensive cover is crucial.
As the new owner, you should note the following points:
Duty to inform: The seller must inform you about the existing insurance.
Notification duty: The change of ownership must be reported to the insurer without delay.
Premium payment: Clarify with the seller how the premium for the current period is to be divided.
Use the special right of termination: Decide within one month whether you want to keep or terminate the contract.
Seamless cover: If necessary, take out a new contract in good time to avoid gaps in insurance cover.
In the event of an inheritance, the special right of termination does not apply; the contract passes to the heir and can only be terminated in the ordinary way. In the case of a compulsory auction, the insurance does not transfer automatically; the purchaser must arrange insurance cover themselves. A precise understanding of these rules helps to avoid pitfalls and to structure insurance cover optimally.
The sample letter in detail: wording and required information
A correctly worded standard letter is crucial to making the change of owner for the residential buildings insurance run smoothly, especially if you wish to exercise your special right of cancellation. The letter should always be sent in writing and ideally by registered post with acknowledgment of receipt, so that you have proof of delivery. Make sure to provide all relevant details correctly. These include your full new address, the exact name of the insurance company, the policy number and the address of the insured property. The date of the change of ownership, i.e. the entry in the land register, is a key point and must definitely be stated. A copy of the land registry extract as proof of the transfer of ownership should be enclosed with the letter. In the letter, explicitly request written confirmation of the cancellation as well as the date the contract ends. This creates clarity and prevents misunderstandings. A properly drafted letter is worth its weight in gold here.
Deadlines and obligations: What buyers and sellers need to know
Both buyers and sellers have specific deadlines and obligations regarding residential building insurance when a property changes ownership. The seller is obliged to inform the buyer of the existence of residential building insurance and to hand over the insurance documents. Both parties, or at least one of them, must notify the insurer of the sale without delay. The most important deadline for the buyer is the one-month period for exercising the special right of cancellation. This begins with registration as the owner in the land register or, if later, upon becoming aware of the insurance. If the buyer misses this deadline, the contract continues as normal and can only be terminated at the next regular cancellation date. Seller and buyer are jointly and severally liable for the premium for the current insurance period, which means the insurer can demand payment from both. A clear agreement on this in the purchase contract is advisable. Knowledge of these cancellation provisions is beneficial for both parties.
Special case: inheritance and forced sale: different rules
Not every change of ownership takes place through a conventional purchase. In the event of inheritance, the residential building insurance automatically transfers to the heir or heirs. Unlike with a purchase, however, heirs have no special right of termination. The contract can only be terminated as normal at the end of the term, subject to the contractual notice periods. The heir fully assumes the rights and obligations of the previous policyholder. Another special case is the acquisition of a property through a foreclosure auction. Here, the existing residential building insurance does not automatically transfer to the successful bidder. The successful bidder must actively arrange new insurance cover to avoid the risk of a gap in cover. It is advisable to find out about suitable insurance options before the auction date. These distinctions are important in order to act correctly in each case and ensure insurance cover.
Changing your buildings insurance when buying a house can be complex. At nextsure, we understand that every property purchase and every life situation is unique. That is why we offer you more than standard solutions. Our experts analyse your specific situation and the existing insurance cover. We help you decide whether taking over the old policy makes sense or whether a new, tailored contract, for example with essential natural hazard insurance, is the better choice for your new home. We support you with all formalities, from reviewing the existing policies to cancelling them and taking out a new, perfectly tailored buildings insurance policy. That way, you can look forward to your new home with peace of mind, knowing that your property is fully protected. Trust our expertise in insurance.
Request an individual risk analysis now: have your insurance situation reviewed free of charge and receive specific suggestions for optimisation.
More useful links
Federal Ministry of Justice provides the full text of Section 95 of the Insurance Contract Act (VVG), which regulates the automatic transfer of the insurance relationship when ownership changes hands.
Federal Ministry of Justice provides Section 96 of the Insurance Contract Act (VVG), which describes in detail the insurer’s and the acquirer’s right of termination.
Federal Ministry of Justice provides information on Section 1922 of the German Civil Code (BGB), which explains universal succession, for example in inheritance law.
GDV (German Insurance Association) publishes media information on residential buildings insurance, including current adjustments to the adjustment factor.
Consumer Advice Centre offers comprehensive information on price increases and the correct cancellation of residential buildings insurance policies.
Consumer Service Bavaria provides a financial compass with detailed information on residential buildings insurance.
Federal Statistical Office (Destatis) offers official statistics and information on housing in Germany.
FAQ
Does the buildings insurance automatically transfer to the new owner?
Yes, according to Section 95 of the Insurance Contract Act (VVG), the residential building insurance is transferred to the buyer when ownership changes (land register entry). This serves to ensure uninterrupted protection of the property.
Can I cancel the assumed buildings insurance?
Yes, as the new owner, you have a special right of cancellation. You can cancel the contract within one month of the entry in the land register or upon notification by the insurer.
Who pays the premium for the buildings insurance when ownership changes?
For the premium for the current insurance period, the seller and buyer are generally jointly and severally liable. A precise agreement in the purchase contract is recommended.
What do I need to tell the insurer when there is a change of ownership?
You should notify the insurer of the change of ownership, stating the insurance number, the property address and the date of the land registry entry. A copy of the land registry extract must be enclosed as proof.
Does the special right of termination also apply in the event of inheritance?
No, in the event of an inheritance, the buildings insurance passes to the heir; however, there is no special right of termination. The contract can only be cancelled in the ordinary course.
What needs to be considered regarding buildings insurance in a foreclosure auction?
In the case of a foreclosure auction, the residential building insurance does not automatically transfer to the purchaser. The successful bidder must arrange new insurance cover themselves.
