Is rent default insurance worth it for landlords in Germany?
In short
Rent default insurance is worth it for landlords in Germany mainly if you let one or a few flats and the rent pays your mortgage. It costs about EUR 84 to 130 a year per flat and usually pays 6 or 12 months of rent. Loss of rent after fire or water damage is a different cover and is often already in your buildings insurance.
Published tariff examples in Germany for cover against non-paying tenants, plus limits from buildings tariffs.
Example
Typical range
One flat, loss of rent up to 6 months, at most EUR 10,000
about EUR 84 a year
One flat, loss of rent up to 12 months, at most EUR 20,000
about EUR 129 a year
Add-on for damage caused by tenants, EUR 10,000 to 50,000
about EUR 42 to 59 a year
Landlord legal cover with loss of rent, one flat, EUR 8,400 gross annual rent
about EUR 19.98 a month, of which about EUR 16 for loss of rent
Loss of rent after damage in a buildings tariff
12 to 36 months depending on the level
As of October 2026.
The premiums come from published tariff examples, some from 2023 and 2024;
current premiums may differ.
The worked example is a guide value from our quoting practice.
We obtain the exact quote for you.
Worked example
Condominium, net rent EUR 800, rent including service charges EUR 1,000
The tenant stops paying in January. You terminate without notice in March, and the tenant only leaves at the end of October. The policy pays up to 12 months of rent from termination, once the deposit is used up.
Loss January to October (10 × EUR 1,000)
EUR 10,000
Deposit, three months' net rent
minus EUR 2,400
Open without insurance
EUR 7,600 plus lawyer, court and eviction
Loss March to October after the deposit, paid by the insurer
EUR 5,600
Your share: January and February before termination
EUR 2,000
With insurance about EUR 2,000 stays with you, without it EUR 7,600 plus legal costs. The premium is about EUR 130 a year.
Two covers with the same name
In German, Mietausfallversicherung can mean two things. One pays when a tenant stops paying and stays in the flat after termination. The other pays when the flat is uninhabitable after a fire, storm or mains water damage and the tenant therefore owes no rent.
Many landlords already have the second one: the German model terms for buildings insurance provide for it, including running service charges, for a number of months set in the policy. Cover against non-paying tenants only exists as a separate policy or as an add-on to landlord legal cover.
Against non-payment
After damage
Trigger
tenant does not pay and does not leave after termination
fire, mains water, storm or hail make the flat uninhabitable
Where insured
separate policy or add-on to landlord legal cover
usually in the buildings policy
Usual duration
6 or 12 months of rent
12 to 36 months depending on the tariff
Cost
about EUR 84 to 130 a year per flat
included in the buildings premium or a few euros
Typical gap
waiting period, excess, rent before termination
maximum period too short for long repairs
What cover against non-payment does and does not do
Under section 543 of the German Civil Code (BGB) you may terminate without notice if the tenant is in arrears for two consecutive due dates with the rent or a substantial part of it, or over a longer period with an amount equal to two months' rent. Many policies only pay from that termination and only once the deposit is used up. Under section 551 BGB the deposit may be at most three months' rent excluding service charges.
Often excluded are normal vacancy, arrears from before the policy started, tenancies with relatives and losses while the lease is still running. For existing tenancies a waiting period often applies, six months in one published tariff. Many insurers expect you to check new tenants' creditworthiness, otherwise the claim may fail.
Check loss of rent after damage in your buildings policy
If damage makes the flat unusable, the tenant owes no rent for that period under section 536 BGB. Buildings insurance then replaces the lost rent if this is included. Published tariffs show 12, 24 or 36 months depending on the level.
Check two points: the maximum period and whether the time until a new tenant moves in after damage is covered too. After major water damage with drying and building permits, 12 months is not always enough. For commercially let rooms, loss of rent must be agreed separately.
When cover against non-payment pays off
It pays off if losing a year of rent would hurt you: a single rented flat, a mortgage that relies on the rent, or rent you need to live on. An eviction often takes many months in which neither rent nor service charges come in.
It is less useful if you let several flats and have savings of a few months' rent. Then your portfolio can absorb one loss, and EUR 100 a year per flat adds up over the years to an amount close to one loss.
When you do not need a separate policy
If your landlord legal cover already includes a loss of rent add-on, a second policy would duplicate it. The same applies to loss of rent after damage if your buildings policy already includes it with a sufficient period.
Careful tenant selection, a deposit and savings also protect you. Insurance does not replace them, because many policies require exactly this check as a condition.
Step by step
Check in your buildings policy whether and for how long loss of rent after damage is covered.
Check whether your landlord legal cover already has a loss of rent add-on.
Work out how many months without rent your own savings can carry.
If needed, compare duration, maximum amount, waiting period and excess.
Check new tenants' creditworthiness before signing and keep a record.
Send reminders early when rent is late and terminate in time so the cover applies.
Checklist
Loss of rent after damage in the buildings policy, at least 12 months
Loss until re-letting after the tenant moves out because of damage covered
Duration against non-payment 12 rather than 6 months if an eviction may take long
Waiting period for existing tenancies known
Credit check of new tenants on file
No double loss of rent cover in two policies
Common mistakes
Confusing loss of rent after fire with cover against non-paying tenants
Taking out cover only once the tenant is already in arrears
Terminating too late and losing months the policy does not pay
Passing the premium on to the tenant through service charges
Accepting new tenants without a credit check although the policy requires it
Questions and answers
Frequently asked
Is rent default insurance worth it for a single flat?
Often yes, if the rent pays a mortgage.
One year of lost rent can cost more than ten years of premiums.
How much does rent default insurance cost in Germany?
Published examples are about EUR 84 a year for 6 months and about EUR 129 for 12 months per flat.
Does buildings insurance pay if the tenant does not pay?
No.
It only pays loss of rent if the flat cannot be used because of insured damage.
When does the insurer start paying for arrears?
In many policies only after valid termination and once the deposit is used up.
Rent before termination often stays with you.
Can I pass the premium on to my tenant?
No.
Section 2 no.
13 BetrKV lists property and liability insurance of the building,
insurance against rent arrears is not included.
Is the premium tax deductible?
Under section 9 of the German Income Tax Act, income-related expenses are costs of securing income.
Ask your tax adviser whether this applies to you.
Are tenants who already live in the flat covered?
Usually yes, but often only after a waiting period, six months in one published tariff.
