# Rent default insurance in Germany: when the tenant stops paying

> If a tenant in Germany stops paying, your mortgage, service charges and property tax keep running, and eviction takes months because only a court can order it. Rent default insurance (Mietausfallversicherung) replaces lost rent up to an agreed limit. It is usually sold as an add-on to landlord legal expenses insurance, which pays for the eviction case itself.

Quelle/Source: https://www.nammert.com/en/insurance-broker-rent-default-insurance.php  
Updated: 2026-11-03

## Isn't the tenant's deposit enough?

Rarely. German law (§ 551 BGB) caps the deposit at three months' net rent. You can only terminate without notice once two months' rent is outstanding (§ 543 BGB), and then you still need a court order and a bailiff. By the time the flat is empty the deposit is usually gone, and legal fees, clearance and redecoration come on top.

## At a glance

- **Compulsory:** no, voluntary cover for landlords
- **Termination without notice:** from two months' rent in arrears, § 543 BGB
- **Deposit cap:** three months' net rent, § 551 BGB
- **Typical limit:** about 5,000 to 20,000 € per claim, depending on the policy
- **Guide price:** entry policies from about 9 € a month for one flat

## One German word, two different covers

In Germany, Mietausfall can mean two things. The first is rent lost because a fire, burst pipe or storm has made the flat uninhabitable. Buildings insurance (Wohngebäudeversicherung) pays that, usually for 12 to 24 months, and it has nothing to do with the tenant.

The second is rent a tenant simply does not pay, whether out of hardship or bad faith. That is what this page is about. It is mostly sold by legal expenses insurers as an add-on to landlord legal cover, and some property insurers sell it as a separate rent protection or rogue tenant policy (Mietnomadenversicherung).

## Why a default lasts longer than expected

German procedure has fixed steps: two months' arrears, termination without notice, an eviction claim at the local court (Amtsgericht), judgment, then enforcement by a bailiff. Self help is never allowed. If the tenant pays everything within two months of being served with the claim, the termination without notice falls away under § 569 BGB, once in any two years.

Each step takes time and no rent comes in meanwhile. That is why the policy limit and the number of months covered matter more than the premium. A 5,000 € limit is used up after a little over four months at a net rent of 1,200 €.

## What insurers want before they cover you

Almost every insurer requires that you checked the tenant's creditworthiness before move in, for example with a SCHUFA style credit report and proof of income. If you skipped this, cover may be refused or restricted.

Arrears that already exist when the policy starts are never covered, and legal expenses add-ons usually carry a waiting period. If you are about to let a property, take out cover before signing the tenancy agreement.

## What is covered

- Lost net rent and, depending on the policy, advance service charge payments
- Lost rent until eviction, up to the agreed limit or number of months
- Lawyer and court fees for the eviction claim under landlord legal cover
- Bailiff costs for the eviction, depending on the policy
- Clearance and redecoration after a rogue tenant, depending on the policy
- Rent lost while the flat is redecorated after the tenant leaves, for a limited time

## What is not covered

- Arrears that existed before the policy started
- Tenants who were not checked as the insurer requires
- Rent lost after fire or water damage, which is a matter for buildings insurance
- Vacancy because no new tenant can be found
- Rent reductions a court considers justified
- The excess, often one to three months' rent

## Who needs it

- Private landlords with one or a few flats whose mortgage depends on the rent
- Landlords letting a property to a new tenant they do not know yet
- Owners of a financed buy to let flat, where two months without rent would put the repayment at risk

## Who does not need it

- Landlords with many units who can absorb a single default from reserves
- Lettings to relatives, which many policies exclude anyway

## What it costs

The premium depends mainly on the annual rent and the limit you choose. Because rent default cover is usually an add-on, you generally pay for landlord legal expenses cover as well.

| Example | Typical range |
| --- | --- |
| One flat, annual rent up to 15,000 €, landlord legal cover with rent default | from about 9 € a month |

**What drives the premium:**

- Annual rent per unit
- Policy limit or number of months covered
- Excess in months of rent or euros
- Number of let units
- Whether eviction and redecoration costs are included

_Entry price of a large German legal expenses insurer, 2026. Higher limits and more units cost more. Your premium is fixed only in the quote._

## The policy levels on the market

- **Basic:** Landlord legal expenses cover without rent default. Pays lawyer and court for the payment and eviction claims; the lost rent is yours to bear.
- **Standard:** Landlord legal cover with a rent default add-on, limit around 10,000 to 15,000 €. Right for most private landlords.
- **Premium:** Higher limit, small excess, plus eviction and redecoration costs after a rogue tenant. For expensive flats and tight financing.

## How to recognise a good policy

| Criterion | Minimum standard | Strong policy | Why it matters |
| --- | --- | --- | --- |
| Limit per claim | about 5,000 € | at least twelve months' net rent | Eviction often takes many months, and a low limit runs out quickly. |
| Excess | three months' rent | one month's rent at most, or none | With a three month excess the insurer only pays from the fourth month. |
| Service charges | net rent only | advance service charge payments included | Service charges keep running and the landlord has to pay them in the meantime. |
| Eviction costs | not included | bailiff, removal and storage included | An eviction with removal firm and storage easily costs several thousand euros. |
| Rogue tenant damage | not included | clearance and redecoration up to a separate limit | Rogue tenants often leave a flat that needs renovating first. |
| Waiting period | several months | short, or none for a new letting | The first months show whether a tenant pays. |
| Tenant screening rules | strict and formal | clearly described and practical | Missing one requirement can cost you the cover when you claim. |

## Insurers on the German market

Rent default cover in Germany comes mainly from legal expenses insurers as an add-on to landlord legal cover, and from a few property insurers as a separate policy. Rent lost after fire or water damage is covered by buildings insurance instead.

- **ARAG**: landlord legal cover with a rent default add-on
- **R+V**: rent protection policy, also sold through cooperative banks
- **Rhion**: rogue tenant policy, sold through brokers
- **ROLAND**: owner and landlord legal cover, also through Haus & Grund associations
- **DEURAG**: legal expenses insurer of the SIGNAL IDUNA group, landlord legal cover
- **ADVOCARD**: Generali's legal expenses insurer in Germany, landlord legal cover

155 insurers supervised by BaFin, the German regulator, are licensed for this class of insurance. (Hagel-, Frost- und sonstige Sachschäden). Source: BaFin company database, 2026-09-18; EU insurers without a German office excluded.

## Typical claims and who pays

- **Tenant pays nothing for six months** (about 5,400 € at 900 € net rent): Landlord legal cover alone pays lawyer and court, not the rent. With the rent default add-on the insurer replaces the rent up to the limit, minus the excess.
- **Eviction claim against tenant** (lawyer and court, four figures depending on rent): This is the core of landlord legal cover. Watch the waiting period, it applies to disputes that start soon after cover begins.
- **Rogue tenant leaves rubbish behind** (clearance and redecoration, often four figures): Only policies with a rogue tenant module pay for clearance and redecoration, usually with a separate, lower limit than for rent.
- **Tenant cuts rent over mould** (surveyor and lawyer, often four figures): Legal cover pays for the dispute. If the reduction is justified, no insurer replaces the reduced rent.
- **Fire makes the flat uninhabitable** (all rent until repairs are done): That is not a tenant default. Buildings insurance replaces the rent, usually for 12 to 24 months.
- **Arrears already before cover** (all rent unpaid up to that point): A loss already under way cannot be insured. Take out cover before letting, not afterwards.

## Myth or truth

- „The deposit covers the loss until the tenant is out." ✘ False: in Germany the deposit is capped at three months' net rent. Termination without notice is only possible from two months' arrears, then come the court case and eviction. By then the deposit is usually used up.
- „From two months' rent in arrears I may terminate without notice." ✔ True: § 543 BGB allows this without prior warning. What counts is the rent owed, not a single late payment.
- „If the tenant pays everything after the eviction claim, the termination without notice falls away." ✔ True, once in two years: the grace period under § 569 BGB runs two months from service of the claim. The proceedings can still leave you with costs.
- „With a rogue tenant I can simply change the locks." ✘ No: only a bailiff with a court order may evict. Locking a tenant out yourself is unlawful self help under German law, makes you liable for damages and can even be a criminal offence.
- „Buildings insurance steps in when the tenant stops paying." ✘ False: it replaces rent only after insured damage such as fire or water. Only separate rent default cover helps against tenants who do not pay.

## Common mistakes

- Relying on the deposit, although it covers three months' net rent at most
- Not screening the tenant the way the policy requires
- Taking out cover only once the rent has stopped
- Confusing loss of rent in buildings insurance with cover for non-paying tenants
- Choosing a limit that covers only a few months' rent
- Changing the locks instead of going to court

## FAQ

### What is the difference between rent default and rogue tenant insurance?

Rent default insurance only replaces the rent. A rogue tenant policy (Mietnomadenversicherung) also pays, depending on the terms, for eviction, clearance and redecoration when a tenant never intended to pay and leaves the flat in a mess.

### Does buildings insurance pay if my tenant stops paying?

No. It replaces rent only while the flat is uninhabitable after insured damage such as fire or a burst pipe, usually for 12 to 24 months. For non-paying tenants you need separate rent default cover.

### When can I terminate for rent arrears in Germany?

Under § 543 BGB you can terminate without notice once the tenant owes two months' rent, or more than one month's rent across two consecutive due dates. No prior warning is needed.

### Can the tenant still stop the termination?

Yes, once in any two years: if the tenant pays all arrears within two months of being served with the eviction claim, the termination without notice becomes void under § 569 BGB.

### Can I insure an existing tenancy?

Often yes, if the tenant has paid reliably so far. Arrears at the start of the policy are never covered, and a waiting period usually applies. Some insurers only cover new tenancy agreements.

### I live abroad and let my flat in Germany. Can I get cover?

Usually yes, the cover is tied to the property in Germany. Some insurers want a German correspondence address or a property manager as contact. Tell us your situation and we will ask the insurers that accept it.

### Can I pass the premium on to the tenant?

As a rule, no. Rent default and landlord legal cover are not among the service charges you may recharge in Germany. Loss of rent after fire is different, as part of buildings insurance it can be recharged with it.

### Why use a broker?

Because policies differ widely on limit, excess, waiting period and tenant screening rules, and those details decide the claim. We compare on your behalf, and the insurer pays our commission.

## Legal basis and sources

- [Insurance Contract Act (VVG, German)](https://www.gesetze-im-internet.de/vvg_2008/)
- [BaFin company database (licensed insurers)](https://portal.mvp.bafin.de/database/InstInfo/)

## Request quotes

We obtain quotes and come back with a comparison, free of charge. You can write in English. https://www.nammert.com/en/insurance-broker-rent-default-insurance.php#anfrage

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