How is buildings insurance split between shops and flats in the same building in Germany?
In short
In Germany, how it is split works on two levels. The insurer rates the whole building by its business share, and once the building is no longer mainly residential, a commercial policy is usually required. Towards tenants, the premium for shops and flats in the same building is split by floor area. If the insurer shows a separate business surcharge, it belongs to the shops first.
Few published examples show how much of the premium the business share accounts for. The other figures are guide values.
Example
Typical range
Building with 60 percent retail and 40 percent residential, value EUR 570,000 (published example)
about EUR 930 a year
Residential building with an office or practice on the ground floor, surcharge
about 0 to 10 percent on the residential premium
Residential building with a restaurant or bakery, surcharge
about 20 to 60 percent on the residential premium
As of October 2026.
The first example is a published sample calculation;
the surcharges are a guide value from quoting practice.
The insurer states the split for your building in the quote.
Worked example
Building with one shop and six flats, 600 square metres
Of an annual premium of EUR 2,400, the insurer shows EUR 800 as the shop's share. The shop has 120 square metres, the flats 480 square metres together.
Without pre-deduction: EUR 2,400 ÷ 600 m²
EUR 4.00 per m², flats pay EUR 1,920
With pre-deduction: shop pays
EUR 800
With pre-deduction: EUR 1,600 ÷ 480 m² living space
EUR 3.33 per m², flats pay EUR 1,600
The pre-deduction saves the flat tenants EUR 320 a year, around EUR 53 for an 80 square metre flat.
Level one: how the insurer rates a mixed use building
A building with a shop on the ground floor and flats above gets one buildings policy. The insurer asks which areas are used for business and what for. If business use dominates, many insurers require a commercial buildings policy (gewerbliche Gebäudeversicherung) instead of a residential one (Wohngebäudeversicherung).
Below that, the residential policy often stays, with a surcharge for the business. A tax adviser's office barely changes the price; a restaurant with a deep fryer raises it a lot, because the insurer prices fire risk by activity.
Level two: how the landlord splits the premium among tenants
For residential tenants, buildings insurance is a recoverable service charge under § 2 No. 13 of the Service Charges Ordinance (Betriebskostenverordnung), covering fire, storm, water and natural hazards. The landlord may only pass it on if the lease provides for it. Without another agreement, it is split by living space, as § 556a(1) BGB says.
For commercial tenants, whatever the commercial lease says applies. It may set a different key or a fixed lump sum. There is no rule forcing an equal split between shops and flats in the same building.
The pre-deduction for business space
If the landlord bills all areas the same way, there is no automatic duty to deduct business costs first. The Federal Court of Justice (BGH) ruled on 25.10.2006 (VIII ZR 251/05) that the residential tenant must show and prove a considerable extra burden before a pre-deduction is required.
It is different if the insurance invoice already splits the premium into residential and business. The Berlin Regional Court required a pre-deduction in that case on 02.08.2004 (62 S 151/04). The law sets no fixed percentage for what counts as a considerable extra burden.
Situation
What applies
Premium not split, business without special risk
splitting by floor area across all tenants is usually fine
Insurer shows a separate business surcharge
allocate the surcharge to the business units first
Restaurant raises the premium a lot
flat tenants can ask for a pre-deduction if they prove the extra burden
Commercial tenants
split according to the commercial lease
Owners' association with a shop in the building
In a condominium, each owner pays costs according to their co-ownership share, under § 16(2) sentence 1 of the Condominium Act (WEG). If the shop makes the buildings insurance more expensive, the owners can resolve a different split for these costs under sentence 2.
The shop owner then pays the business surcharge. For that, the property manager needs a breakdown from the insurer showing which part of the premium relates to the business.
When a separate split is not worth it
With an office or a medical practice that adds no surcharge, there is nothing to deduct, and splitting by floor area is simple and fair. A special key just makes the mixed use building's statement more error prone.
A separate split pays off when a business with a high fire load noticeably raises the premium. Ask the insurer for the breakdown in writing so the statement holds up if tenants query it.
Step by step
Report every business unit to the insurer with its activity and size.
Ask for a written split of the premium into residential and business.
Check the leases: is passing on buildings insurance agreed?
Allocate any business share shown by the insurer to the business units first.
Split the rest by living space and show the calculation in the statement.
Checklist
Business share known in square metres and percent
Activity of every commercial tenant reported to the insurer
Written premium split into residential and business
Clause on passing on costs in every lease
Resolution on cost split in an owners' association
Common mistakes
Not reporting a new commercial tenant and putting cover at risk
Spreading a separately shown business surcharge over all flat tenants
Charging commercial tenants costs the lease does not provide for
Keeping a mainly commercial building on a residential policy
Questions and answers
Frequently asked
Do I need two policies for a building with a shop?
No, the building gets one policy.
Whether it is residential or commercial depends on the share and type of business.
The shop's contents are insured by whoever runs the shop.
Can my landlord split buildings insurance by square metres?
Yes, without another agreement that is actually the default under § 556a(1) BGB.
If the business clearly costs more, a pre-deduction may be needed.
Who has to prove that the business raises the cost?
If the landlord bills everyone by floor area,
the flat tenant must show the considerable extra burden.
If the insurance invoice shows the business share, that proof is easy.
When does a mixed use building count as commercial?
Under the German model conditions for residential buildings (VGB 2022, A 7.1),
the building must be mainly used for living.
Once business use outweighs it, a commercial policy is usually needed.
Your insurer's terms decide, so ask before signing.
As a shop owner in an owners' association, do I pay more?
Only if the owners resolve it or the declaration of division (Teilungserklärung) provides for it.
