The big three - building insurance, household contents insurance and liability insurance, what are the differences and which covers what and when? These can be tricky to navigate as the lines between them can get a bit blurry.
In essence, building insurance protects the building itself, household contents insurance protects the things you bring into your apartment, and liability insurance protects you from damages you cause to other people or their property. Now let’s take a deeper look into each one of them to have a better understanding of what exactly is covered and when.
What is building insurance? (Wohngebäudeversicherung)
This insurance is for the owner of the building/apartment. If you’re renting, the landlord or Hausverwaltung will have this insurance, it’s part of the ancillary costs (Nebenkosten) of your rent so you don't need to worry about it. It covers the apartment itself from the insured events, fire, storm, hail, water damage, and burglary.
For example, if an internal water pipe* bursts and damages the wall, the costs of repairing that pipe and wall would be covered.
Building insurance doesn't cover the things inside your home like TVs, cash, or furniture, that’s when household contents insurance comes in handy.
*internal pipe - it's a pipe that you can't see and is built inside the walls or under the floor, it's part of the building, therefore it is covered by building insurance
What is household contents insurance?(Hausratversicherung)
Everything that you bring into the building/apartment is covered by household contents insurance. These would be the things that you would take with you when you leave such as furniture, electronics, books etc. Imagine if you were to turn your apartment upside down, everything that falls out would be covered by this insurance. Just like building insurance, household contents insurance protects your belongings from specific insured events, such as fire, burglary, robbery, water damage, storm, and hail.
For example, if an external water pipe* bursts and damages your vintage book collection, that would be covered or if all of your clothes, furniture and electronics were to burn in a fire, replacing these items would be covered.
Household contents insurance doesn't cover damage to the fixed components of the building, non-insured events or accidental damage you do.
*external pipe - it's a pipe that you can see and is not built inside the building, for example a radiator pipe or a kitchen sink pipe or a washing machine pipe
What is personal liability insurance? (Privathaftpflichtversicherung)
Personal liability insurance protects you from the accidental damage you cause to somebody else or their property. In contrast with the other two insurances, this policy has a halo effect as it protects you wherever you are, it’s not tied to a specific place or an item. For example, you’re covered if you accidentally drop a pickle jar on your landlord’s tiled floor and it gets damaged. You’re also covered when you’re out and about. For example, if you accidentally walk in the bike lane, and you have an accident with a cyclist and they fall, break the bike and get injured, these costs would be covered.
Liability insurance doesn't cover damages to your own belongings, glass in your rented apartment, or damages due to wear and tear or mold growth.
Some examples of claims:
You notice a damp patch on the wall of your rented apartment and call your landlord to inspect it. They discover a leak in a pipe within the wall, caused by rust and normal wear and tear of old pipes. You haven't directly caused the damage and none of your personal belongings have been affected. This would be covered by your landlord's building insurance.
The radiator in your living room bursts right next to your DJ decks. They're ruined along with your record collection. This is an external pipe and damage is to your property, so this would be covered by household contents insurance.
You wrongly installed your washing machine and now it looks like there's water leaking in the wall from an internal pipe. As the leak is from an internal pipe, your landlord first has to submit the claim with their building insurance. As you caused the leak through the incorrect installation of the washing machine you're liable for some of the damages, however, this will be determined by the building insurance. They'll get in touch with your liability insurance to recoup some of the costs after they've processed the claim.