Property Valuation
Strategy recommendation
Insurance strategy
Are you facing the challenge of optimally insuring your property without breaking the bank? A well-thought-out insurance strategy not only protects your assets but can also reduce your annual costs by up to 15%. Find out how to choose the right policies and avoid pitfalls.
With access to Google, BORIS, and Deep Research.
A solid insurance strategy for real estate is based on residential building, homeowner, and property owner liability insurance, as well as natural hazard insurance.
Regular review and adjustment of insurance policies can reduce costs by up to 15-20% and close coverage gaps.
An accurate property valuation is essential to avoid underinsurance; the value from 1914 and the construction price index are important factors in this regard.
Do you own property and wonder if your insurance coverage is truly optimal? Many owners pay for unnecessary policies or are underinsured in serious situations. A solid insurance strategy is crucial to mitigate financial risks such as natural disasters or liability claims, which can quickly reach six-figure sums. This article shows you how to effectively protect your property values, avoid cost pitfalls, and optimise your insurance premiums. With the right strategy, you secure your assets in the long term and gain financial security.
The first step to a robust insurance strategy is to identify the core insurances. For every property owner in Germany, at least three insurances are essential. The homeowners insurance covers damage caused by fire, water pipes, storms, and hail – risks that annually cause billions in damages.
In addition, there is the landlord liability insurance. This protects you from third-party claims for damages if, for example, someone is injured on your property; the claims can quickly reach threatening levels. Given the increasing occurrence of extreme weather events, the natural hazard insurance, which offers protection against flooding, heavy rain, or landslides, is becoming increasingly important – around half of the buildings in Germany do not yet have this protection. A solid foundation of these insurances is crucial. The exact configuration of these policies forms the core of your individual protection.
A detailed risk analysis is the starting point of any effective insurance strategy. Not every property is exposed to the same risks. Is your property located in a flood-prone area or a region with frequent storm damage? The average damage per case from flooding events, such as in the Ahr Valley in 2021, was €42,100.
In addition to natural hazards, technical risks like water damage from leaks, which occur more than 1 million times annually, or fire damage should also be taken into account. For landlords, there is the added risk of rental defaults or damage caused by tenants, making policies like rental loss insurance worthwhile. A thorough examination of your property's specific risks helps to avoid overinsurance and close coverage gaps. Also, consider liability risks; an unsecured pavement in winter could lead to compensation claims running into six figures. The risk assessment of your property is a dynamic process.
An extensive insurance strategy does not mean taking out as many policies as possible, but rather the right ones – and at fair conditions. There are several ways to optimise your insurance costs without jeopardising protection. A key point is the regular review of your contracts, as rates and conditions change; switching can often bring advantages.
The following measures can reduce your premiums:
Adjust deductibles: A higher deductible can reduce the premium by several percent, e.g. by 10-20% with an increase of the deductible from 0 to 500 euros.
Compare tariffs: Use independent comparison portals or seek advice. Differences of up to 30% for comparable services are not uncommon.
Take advantage of bundle discounts: Many insurers offer discounts of 5-15% if you take out multiple insurances (e.g. homeowners and household insurance) with them.
Optimise payment methods: An annual payment method is often up to 5% cheaper than a monthly or quarterly payment.
Implement security measures: Investments in security technology (e.g. smoke detectors, alarm systems, backwater valves) can have a positive impact on the premium and reduce risk by up to 25%.
Also check whether you have a special right of termination after a premium increase, which allows you to switch within a month. Avoiding coverage gaps is just as important as cost savings.
Protection against natural disaster damage is becoming an increasingly important focus of insurance strategies for real estate. Given the increase in extreme weather events, politicians have been discussing compulsory insurance against natural disaster damage for years. Currently, only about 50% of residential buildings in Germany are insured against damage from flooding, heavy rain, earthquakes, or landslides.
Although there is not yet a nationwide obligation, taking out natural disaster insurance is highly recommended for most property owners. The costs for damage caused by natural disasters can be immense; the flood disaster in 2021 resulted in insured damages of around 8.2 billion euros. Such a policy generally covers costs for repairs, refurbishment, drying out, and in the worst case, demolition and rebuilding. The premium is determined by the risk zone (ZÜRS zone) of your property. Do not underestimate this risk, even if your property is not in a designated high-risk zone, as heavy rainfall can cause flooding anywhere. It is particularly critical to avoid underinsurance here.
An accurate property valuation is often underestimated but is a critical component of your insurance strategy. The sum insured in your buildings insurance should correspond to the current rebuild value of your property to avoid being underinsured in the event of a claim. Underinsurance can result in the insurer covering only a portion of the costs, even if the damage is less than the sum insured.
The '1914 value' is a common calculation basis here, adjusted annually by the construction price index to ensure a dynamic new value insurance. An incorrect valuation can lead to undercoverage of up to 30%. Auctoa offers AI-supported valuations as a quick and neutral way to determine the correct value of your property, forming the basis for an appropriate sum insured. This is particularly important for older properties or following extensive modernisations. Accurate valuation helps to minimise financial risks.
Your insurance strategy is not a static construct; it needs to be regularly adapted to changing circumstances. You should review your insurance policies at least every three to five years. Reasons for an earlier review might include:
Changes to the property: Extensions, renovations, or energy-efficient upgrades can alter the value of your property and thus affect your insurance needs. An increase in value of 10% should prompt an adjustment.
Change in risk situation: New insights about natural hazards in your region or changes in legal regulations may necessitate an adjustment.
Personal changes: A sale, an inheritance, or a change in the use of the property (e.g., renting it out) require a review of the insurance coverage.
Market changes: New tariffs or more affordable offers from other insurers can offer savings opportunities of up to 20%.
Document all changes carefully and inform your insurer promptly. A proactive adjustment of your insurance applications ensures optimal protection and prevents unpleasant surprises in the event of damage. Continuously maintaining your insurance strategy is an important component of risk management for properties.
Developing an optimal insurance strategy can be complex. As your digital compass for property valuations and strategic advice, Auctoa not only supports you with precise, AI-driven valuations but also helps you ask the right questions to your insurance advisors. A neutral evaluation by Auctoa can form the basis for determining correct insurance sums, thereby reducing the risk of under or over-insurance by up to 25%.
Do you need a quick, data-driven assessment of your property’s current value as a basis for your insurance discussions? Our ImmoGPT chat is available 24/7 for initial inquiries. For a detailed analysis and advice on how an optimised insurance strategy can cover your specific risks and reduce costs, get in touch with us now without obligation. We help you gain clarity and sustainably secure your property values.
Wikipedia offers a comprehensive overview of residential building insurance in Germany.
The German Insurance Association (GDV) provides detailed information on residential building insurance and its benefits.
The Federal Statistical Office (Destatis) provides official data and indices on construction prices and the real estate market.
The Consumer Advice Centre offers independent information and advice on residential building insurance for homeowners.
The Federal Environment Agency explains the necessity and measures for adapting to the impacts of climate change.
The German Weather Service (DWD) provides a climate atlas with comprehensive weather and climate data for Germany.
The Federal Office for Civil Protection and Disaster Assistance (BBK) provides information on risk management and strategies to protect against disasters.
The German Insurance Association (GDV) offers current statistics and reports on natural hazards and their effects on insurance.
What is the difference between homeowners and buildings insurance?
Buildings insurance covers damage to the building itself and fixed elements (e.g. heating, windows, roof). Homeowners insurance covers movable items in the house or flat (e.g. furniture, clothing, electronics) against damage such as fire, burglary, or water leakage.
How often should I review my property insurance strategy?
It is recommended to review your insurance strategy every 3-5 years or in the event of significant changes such as renovations, value increases, sales, inheritances, or changes in risk factors.
Is landlord rental default insurance worthwhile?
Rental default insurance can be worthwhile if tenants fail to pay rent or if the property becomes uninhabitable due to damage. It protects against loss of income. However, the costs cannot be passed on to tenants, and often buildings insurance already covers rental loss for up to 12 months under certain damage conditions.
What does 'sliding new value' mean in buildings insurance?
The sliding new value ensures that the insurance sum adjusts annually to the development of construction prices. It is often based on the notional value of the building in 1914, multiplied by the current construction price index to prevent underinsurance.
Can I deduct my insurance premiums from tax?
Contributions to landlord liability and buildings insurance for rented properties can be claimed as advertising costs in the tax declaration. For owner-occupied properties, these costs are generally not deductible unless they involve household-related services provided under the insurance (e.g. maintenance of smoke detectors).
What happens to buildings insurance when a house is sold?
When a house is sold, the existing buildings insurance is transferred to the buyer in accordance with § 95 of the Insurance Contract Act (VVG). However, the buyer has a special right of termination within one month of entry in the land register.
