Is natural hazard insurance tax deductible in Germany?

Guide values for premium and tax effect as of September 2026. The 30 percent tax rate is for illustration only.

For insurance, German tax law mainly allows provision for yourself: health, care, pension and certain liability premiums. Natural hazard cover protects a thing, your house or your belongings. That counts as private living costs and stays outside your tax return.

It makes no difference whether natural hazard cover is an add-on to your buildings or contents insurance or a separate policy. The insurance tax included in the premium does not change that either.

If you let a house or flat, you deduct the natural hazard premium for that property as income-related expenses against your rental income. In a building where you live in one flat yourself, only the share of the rented floor area counts.

You can usually pass property insurance costs on to tenants through the service charges (Nebenkosten) if the tenancy agreement says so. The deduction is then matched by the same amount of income, so the tax effect is zero. The benefit lies in passing on the cost, not in the tax.

Since 2023 a home office (Arbeitszimmer) only counts if it is the centre of your entire professional activity. Then you can deduct a share of the room costs, including the natural hazard premium. Instead, you can take a flat EUR 1,260 a year, which covers all individual costs.

Few people know this: without natural hazard insurance you can claim the cost of repairing your own home and replacing furniture, household goods and clothing as extraordinary burdens (außergewöhnliche Belastungen) under Section 33 of the Income Tax Act. The tax authorities do not see natural hazard cover as standard insurance that you should have taken out.

This does not replace insurance. Only the part above a reasonable own share (zumutbare Belastung) counts, about 1 to 7 percent of your income depending on income and family. Only necessary items are recognised, and the tax office never refunds the loss, it only lowers your tax. Even with a high tax rate you carry more than half of the damage yourself.

After major floods the federal states often issue a disaster decree with extra relief. Whether the tax authorities keep this generous approach is not guaranteed.

For work done by tradesmen in your own household there is a tax reduction under Section 35a of the Income Tax Act of 20 percent of the labour costs, up to EUR 1,200 a year. After a natural hazard loss it only applies to the part you pay yourself. Whatever the insurer refunds is excluded.

You cannot use both: costs you claim as extraordinary burdens cannot also go through the tradesmen's reduction.

The tax question is understandable, but it does not decide anything. For owner-occupiers the saving is zero, for landlords who pass the cost on it is zero too, and for a home office it is a few euros.

What matters is whether you could pay for damage of EUR 30,000 to over EUR 100,000 yourself. If not, natural hazard cover belongs in your policy, with or without a tax benefit.