Personal liability insurance pays for damaged property based on its current value, not the price of a new replacement. Once we finalize the settlement, your liability to your landlord for that incident ends. If your landlord takes legal action over the settlement, the passive legal protection in your policy covers the defense and any higher amount a court orders. If your landlord keeps your security deposit instead, you can send a formal demand, ask us for an official settlement letter, and as a last resort go to court, get help from a tenants’ association or a lawyer.
Why doesn’t my personal liability insurance pay the full price of a new replacement?
Your personal liability insurance pays for damaged property based on its current value (Zeitwert) at the time of the damage, not on what a new replacement costs. When we calculate the current value, we take the item’s age and wear and tear into account, so the payout is usually lower than the price of a new item. This drop in value is called depreciation.
What is depreciation, and why does it lower my liability payout?
Depreciation is the natural decline in value of an item over time due to wear and tear, usage, aging, and even changes in technology.
Think about it like this:
When you buy a brand-new laptop today for $1,000, it won't still be worth $1,000 two years later.
Even if it’s in excellent condition, newer models and regular usage mean it might now only be worth $400 or $500.
That reduction in value is depreciation.
Depreciation recognizes that older items are less valuable than brand-new ones.
How do we calculate the current value of damaged property?
Insurance companies generally use a standard formula to calculate the current, depreciated value of your belongings. Here's the usual approach:
Determine the original purchase price
How much you paid for the item when it was new.
Estimate the useful life
Each item type (like electronics, clothing, or luggage) has an expected "useful life." For example:
Laptops: 3-5 years
Smartphones: 2-3 years
Clothing: 2-3 years
Suitcases: 5 years
Calculate annual depreciation
Divide 100% of the value by the number of years in its useful life.
Example: If a laptop has a 5-year lifespan, it loses about 20% of its value each year.
Factor in the item’s age
Multiply the depreciation rate by the number of years you've owned it.
Subtract depreciation from the original price
That final amount is what it's called the Actual Cash Value (ACV), and it's the amount that your reimbursement will be based on.
Quick Example
You bought a suitcase for €300 two years ago.
The insurer considers a suitcase to have a 5-year lifespan.
Depreciation rate = 20% per year.
After two years: 20% × 2 years = 40% total depreciation.
Value after depreciation: €300 - (€300 × 0.40) = €180.
Your reimbursement would be around €180, not €300.
Why Does Depreciation Matter?
Because it ensures fairness.
Insurance is designed to put you back in the position you were in before the loss, not to make a profit or upgrade your belongings. Covering the full new price of old items would unfairly benefit some people, and insurance works by being fair for everyone in the pool.
Can my landlord demand more money from me after my liability claim is settled?
Your landlord can’t ask you to personally pay more money after we finalize your liability claim. The finalized settlement ends your direct liability to your landlord for that incident, so you don’t owe the gap between the payout and what your landlord expected. If your landlord disagrees with the settlement amount, the only way to dispute it is through formal legal channels. In that case, the passive legal protection (passiver Rechtsschutz) in your personal liability insurance handles the dispute for you.
What happens if my landlord disagrees with my settlement and threatens legal action?
Your personal liability insurance includes passive legal protection (passiver Rechtsschutz). It covers disputes over a settled liability claim when your landlord threatens or files legal action. With passive legal protection:
We take over the dispute for you, so you don’t need to negotiate the settlement calculation with your landlord.
We pay the defense and court costs needed to reject your landlord’s unjustified demands.
Barmenia, our insurance partner, appoints a lawyer to represent the case. If you hire your own lawyer, we don’t cover that lawyer’s fees.
If a judge rules that the original payout was too low, we pay the revised amount, so you don’t pay the difference yourself.
What should I do if my landlord keeps my security deposit after a settled liability claim?
If your landlord keeps your security deposit (Mietkaution) after we’ve settled your liability claim, you can take these steps in order:
Send your landlord a formal demand by letter or email. Say that the claim has been settled through your personal liability insurance and ask for the deposit back by a specific deadline. Keep copies of all correspondence.
If your landlord ignores the demand, ask us for an official letter confirming that the claim was settled in line with German civil law (§249 BGB). You can contact our support team for more assistance or additional resources.
If your landlord still keeps the deposit but doesn’t take formal legal action, get advice from a tenants’ association (Mieterverein) or a lawyer who specializes in tenancy law (Mietrecht). This situation isn’t covered by the passive legal protection in your personal liability insurance.
As a last resort, file a claim at your local district court (Amtsgericht) to get your deposit back. Many tenants’ associations help their members with this.
If your landlord disputes the settlement amount through formal legal channels at any point, passive legal protection applies, and we pay any higher amount a court orders.
Does passive legal protection apply if my liability claim was denied?
Passive legal protection doesn’t apply if your liability claim was denied because the damage isn’t covered. Passive legal protection only applies to damages your personal liability insurance covers. If the damage falls under a policy exclusion, such as damage from excessive use, mold, or intentional acts, passive legal protection doesn’t apply.