Does buildings insurance pay on a quote without a repair in Germany?
In short
Yes, German buildings insurance (Wohngebäudeversicherung) does pay on a quote without a repair, but usually less: the 19 percent VAT (Mehrwertsteuer) is left out, so a EUR 11,900 quote becomes about EUR 10,000. If the house is destroyed and not rebuilt, you only get its current value (Zeitwert). The rest is paid once rebuilding is secured within three years.
Worked figures based on the VGB 2022 model terms and the German VAT rate of 19 percent.
Example
Typical range
Storm damage to the roof, quote EUR 5,950 gross, no repair
about EUR 5,000
Escape of water, quote EUR 11,900 gross, no repair
about EUR 10,000
Same damage, repaired with invoice for EUR 11,900
EUR 11,900 minus deductible
Fire, new value EUR 400,000, current value EUR 280,000, no rebuilding
about EUR 280,000; the EUR 120,000 new-value part is lost
Worked examples under the VGB 2022 model terms for new-value cover, October 2026.
The loss amounts are freely chosen sample figures.
Your policy may differ from the model terms.
Worked example
Hail on a garage roof, 20-year-old metal sheeting
The owner does not want to replace the roof yet because it is watertight and only dented.
Roofer's quote, gross
EUR 7,140
Of which 19 percent VAT
EUR 1,140
Payout without repair, net
EUR 6,000
Deductible under the policy
EUR 500
Repaired later with invoice for EUR 7,140
VAT paid on top, EUR 1,140
She receives EUR 5,500 straight away and can claim the VAT if she repairs later. Worked example with guide values.
How a cash settlement works in Germany
Does buildings insurance in Germany have to fund a repair? No, it pays money, not a repair. You may settle a claim on a quote (Kostenvoranschlag) or an expert report and decide yourself whether and when to repair.
The model terms of the German insurers' association (VGB 2022, clause A 17.9) say that VAT is only refunded if and to the extent it was actually incurred for the repair, and never if you can reclaim it as input tax. With a cash settlement on a quote, you therefore receive the net amount.
Situation
What you receive
What is left out
Partial damage, repaired with invoice
repair costs including VAT
only your deductible
Partial damage, settled on a quote
repair costs net of VAT
19 percent VAT
Total loss, rebuilding secured
new value (Neuwert)
nothing
Total loss, no rebuilding
current value (Zeitwert)
new-value part and VAT
Landlord entitled to reclaim VAT
always net
VAT even with an invoice
Why the 70 percent figure is a myth
Expat forums often say German insurers pay only 70 percent if you do not repair. No model wording contains such a rate. The cut comes from VAT: 100 divided by 119 is about 84 percent of the gross quote.
On a partial loss the model terms for new-value cover (Gleitender Neuwert) pay the necessary repair costs (clause A 17.1.1.2) and make no deduction for age. You get less than 84 percent if your deductible or underinsurance applies, or the insurer rejects items in the quote as too expensive. Ask for every deduction in writing.
Total loss: the new-value part needs rebuilding
After a fire that destroys the house, the payout comes in two parts. First the current value. The difference up to the new value, the Neuwertanteil, is only paid under VGB 2022 clause A 17.6 if you make sure the money goes into rebuilding on the same plot within three years.
German law expressly allows this (section 93 of the Insurance Contract Act, VVG). If you fail to rebuild within a reasonable time through your own fault, the insurer can claim back a new-value payment already made.
When settling without repair makes sense
It suits purely cosmetic damage, such as hail dents on an old metal garage roof, or a house you are about to renovate or sell anyway. People who repair themselves also often settle on the quote and claim the materials later with receipts.
It does not suit damage that keeps getting worse, like a leaking roof or a damp basement. Follow-up damage from a cause you did not fix is not paid a second time by the buildings insurance.
Repairing later and claiming the VAT
If you settled on a quote and later hire a contractor after all, send in the invoice. Because clause A 17.9 ties VAT to the actual repair and sets no separate deadline, the buildings insurance can then still refund the VAT you paid on repairing this damage.
Mind the limitation period: claims under a German insurance contract expire three years after the end of the year in which they arose (sections 195 and 199 of the Civil Code, BGB).
If you disagree on the amount
Under VGB 2022 clause A 18 you can demand an expert procedure (Sachverständigenverfahren): each side appoints an expert, and an umpire decides if they disagree. This is usually quicker and cheaper than court.
One month after reporting the claim you can also ask for an interim payment of the amount that is due at minimum (clause A 19.1.1).
Step by step
Report the damage at once and take photos; do not throw anything away.
Get a quote that shows net amount and VAT separately.
Agree with the insurer that you settle on the quote.
Still fix anything that would cause further damage.
If you repair later, send the invoice and claim the VAT.
After a total loss, secure rebuilding within three years with binding contracts.
Checklist
Quote shows net and VAT separately
Deductible known
Every deduction explained in writing
Invoices for later repairs kept
Three-year deadline in your calendar
Mortgage lender informed if the house is financed
Common mistakes
Expecting the gross amount without repairing
Believing in a fixed 70 percent rule
Leaving a leak unrepaired and claiming follow-up damage
Missing the three-year deadline after a total loss
Questions and answers
Frequently asked
Do I have to repair for the insurer to pay?
No.
On a partial loss it pays without repair, but net of VAT.
On a total loss you get only the current value unless you rebuild.
Will I only get 70 percent?
There is no such rule.
The usual cut is the VAT, leaving about 84 percent of the gross quote.
Any further deduction must be explained.
Can I claim the VAT later?
Yes, if you have the work done and submit the invoice.
The insurer refunds the VAT actually paid, up to the agreed loss.
Can I do the repair myself?
Yes.
VAT on materials bought with receipts is actually incurred, so clause A 17.9 refunds it.
Agree in writing in advance how your own time is paid.
How long do I have to rebuild?
Under the model terms, rebuilding must be secured within three years after the loss.
