# Rent deposit insurance in Germany: no cash tied up, but the debt is still yours

> German landlords usually ask for a deposit of up to three months' rent. Instead of paying it in cash, you can hand over a guarantee certificate from an insurer and pay a yearly fee. If the landlord claims against the guarantee, the insurer pays and then recovers the money from you.

Quelle/Source: https://www.nammert.com/en/insurance-broker-rent-deposit-insurance.php  
Updated: 2026-11-05

## Does my landlord have to accept a deposit guarantee?

No. The lease says what kind of security you owe, and you have no right to replace a cash deposit with a guarantee. Many landlords accept a certificate from a known insurer, so ask before you sign up. Swapping a deposit you have already paid for a guarantee also needs the landlord's agreement.

## At a glance

- **Maximum deposit:** three months' rent excluding service charges, guarantees included
- **Cash deposit:** may be paid in three monthly instalments
- **Landlord consent:** required, a guarantee is not a right
- **Typical fee:** around 3 to 6% of the deposit per year
- **Legal basis:** Section 551 of the German Civil Code (BGB)

## The rules every German deposit follows

For residential lets, Section 551 BGB caps any security at three times the monthly rent, counted without advance payments for heating and service charges, the so called net cold rent. The cap covers cash, a deposit account and any guarantee. If a landlord asks for a guarantee on top of a cash deposit, both count towards the same limit.

A cash deposit can be paid in three equal monthly instalments, the first when the tenancy begins. The landlord must keep it in a bank account separate from his own money, and the interest belongs to you. Lease terms that put you in a worse position than the statute are void.

## How an insurer's guarantee works

You take out a contract with the insurer, which issues a guarantee certificate (Bürgschaftsurkunde) to your landlord for the deposit amount. It is normally a direct guarantee (selbstschuldnerische Bürgschaft): the landlord can claim straight from the insurer without suing you first.

Whatever the insurer pays out, it reclaims from you. The guarantee keeps cash in your pocket when you move in; it does not protect you when you move out. If you expect a dispute over damage or arrears, factor that in before choosing it over cash.

## Is it worth it for a newcomer?

Moving to Germany often means paying a deposit, furniture and sometimes an agent at once, before the first salary arrives. That is where a guarantee helps. Over a five year tenancy with a 1,500 euro deposit, though, fees of 3 to 6% add up to roughly 225 to 450 euros you never see again, while a cash deposit even earns a little interest.

Insurers usually check your credit history before issuing a guarantee, and a short German credit record can make that harder. If you can raise the cash, the deposit account is normally the cheaper route.

## What is covered

- A guarantee certificate for the agreed deposit amount, issued to your landlord
- Payment of justified claims from the tenancy up to the guaranteed sum
- Rent arrears, service charge balances and damage to the flat, as far as the deposit secures them
- A check of the landlord's claim before payment, depending on the provider
- Replacing an existing cash deposit, if the landlord agrees

## What is not covered

- Your own debt: anything the insurer pays, it recovers from you
- Claims above the guaranteed amount
- Damage you cause to the flat as a liability matter, that is for personal liability insurance
- Your belongings in the flat
- The fee itself, which is not refunded even if nothing ever happens

## Who needs it

- New arrivals who need their savings for the move and the first months
- Tenants moving before the old deposit has been returned
- Anyone who would otherwise borrow at a high rate to fund the deposit

## Who does not need it

- Tenants who can pay the deposit in cash without strain
- Tenants expecting deductions when they move out: the insurer will reclaim them anyway

## What it costs

The fee is a percentage of the deposit, charged every year for as long as the guarantee is in place. Some providers add a minimum annual fee or a one off set up charge.

| Example | Typical range |
| --- | --- |
| Net rent 500 €, deposit 1,500 € | around 45 to 90 € a year |
| Net rent 1,000 €, deposit 3,000 € | around 90 to 180 € a year |

**What drives the premium:**

- Size of the deposit
- The provider's percentage rate
- Minimum fee and one off charges
- How long the guarantee runs, until the certificate is returned
- Your credit check result

_Calculated with 3 to 6% of the deposit, the range given by German comparison sites. Minimum fees can make small deposits dearer. Your price is fixed only in the quote._

## The policy levels on the market

- **Guarantee:** Certificate for the deposit amount at a yearly percentage. The insurer pays on the landlord's demand and then reclaims from you.
- **Guarantee with claim review:** The insurer checks whether the landlord's claim is justified and hears your side before paying. Useful protection against inflated move out bills.
- **Cash deposit account:** No running cost, the money earns interest and comes back after the final statement. The cheapest option if you have the cash.

## How to recognise a good policy

| Criterion | Minimum standard | Strong policy | Why it matters |
| --- | --- | --- | --- |
| Fee rate | up to around 6% a year | at the lower end of the range | You pay it for the whole tenancy and never get it back. |
| Minimum fee and charges | minimum fee plus set up charge | neither | Fixed amounts wipe out the advantage on small deposits. |
| Claim review | pays on demand | checks the claim and hears the tenant | You owe the insurer whatever it pays, so a review stops it from settling inflated claims. |
| End of contract | not clearly defined | ends when the certificate is returned | Otherwise you keep paying after moving out until the landlord releases the guarantee. |
| Acceptance by landlords | certificate from a little known provider | certificate from a well known insurer supervised by BaFin | Landlords need not accept a guarantee, and a familiar name makes a yes more likely. |
| Switching back to cash | only with landlord consent | possible at any time if the landlord agrees | Once you have the money, switching saves the yearly fee. |

## Insurers on the German market

In Germany a handful of large property insurers issue rent deposit guarantees for homes, often through their own brands or online portals. The list shows insurers supervised by BaFin as a market overview, not a statement about who we work with.

- **R+V**: own deposit guarantee and guarantor behind the kautionsfrei.de portal
- **Allianz**: own deposit insurance, guarantor for the residential product of Deutsche Kautionskasse
- **Württembergische**: deposit guarantee for private tenants plus a separate commercial product
- **AXA**: listed by Stiftung Warentest in 2021 with a rent guarantee under the Heysafe brand
- **ERGO**: deposit insurance for commercial tenants only, not for homes

## Typical claims and who pays

- **Landlord bills for damage** (around 500 to 1,500 €): The insurer pays the landlord up to the guaranteed sum and then reclaims it from you, just as a landlord would keep part of a cash deposit.
- **Inflated move out claim** (a few hundred euros): Without a review the guarantor pays on demand and you have to chase the landlord yourself. Better providers check first and ask for your side.
- **Two months of rent unpaid** (around 1,000 to 2,000 €): The deposit secures rent arrears as well. The insurer pays and its claim against you follows.
- **Damage above the deposit** (around 5,000 €): Payment is capped at the guaranteed sum, three months' net rent. The landlord claims the rest from you directly.
- **Insurer wants its money back** (the full amount paid): A deposit guarantee does not insure your loss. You owe the guarantor what it paid, whatever the product.
- **Your washing machine floods** (around 2,000 to 10,000 €): That is a liability claim. Personal liability insurance with rental damage cover pays it, not the deposit guarantee.

## Myth or truth

- „With a deposit guarantee I no longer pay for damage when I move out." ✘ False: the insurer pays the landlord and then recovers the money from you. You save on cash up front, not on the debt.
- „My landlord can ask for a guarantee and a full cash deposit as well." ✘ False: for homes all securities together are capped at three months' rent excluding service charges. Anything above that can be reclaimed.
- „I do not have to pay a cash deposit in one go." ✔ True: Section 551 BGB allows three equal monthly instalments, the first at the start of the tenancy.
- „German landlords must accept a guarantee instead of cash." ✘ False: the lease defines the security, and whether to accept a guarantee is the landlord's decision.
- „Interest on my cash deposit belongs to me." ✔ True: the landlord must keep the deposit apart from his own money, and the interest is added to your deposit.

## Common mistakes

- Treating the guarantee as insurance that pays your bill when you move out
- Signing up before the landlord has agreed to accept it
- Accepting a guarantee on top of a full cash deposit, beyond three months' net rent
- Forgetting to get the certificate back from the landlord after moving out
- Paying yearly fees when the cash is sitting in your account

## FAQ

### How much does a rent deposit guarantee cost?

German comparison sites quote around 3 to 6% of the deposit per year. On a 1,500 euro deposit that is about 45 to 90 euros annually. Some providers charge a minimum fee or a set up charge.

### Do I have to repay the insurer if it pays my landlord?

Yes. The insurer only stands as guarantor. Whatever it pays to the landlord, it reclaims from you. The guarantee replaces handing over cash, not the debt.

### How much deposit can a German landlord ask for?

For a home, no more than three months' rent excluding service charges, under Section 551 BGB. The limit also applies to guarantees and to cash and guarantee combined. Anything paid above it can be reclaimed.

### Can I get a guarantee without a German credit history?

It can be harder. Providers normally run a credit check because they may have to recover money from you. Ask before applying which documents from abroad they accept.

### Can I pay a cash deposit in instalments?

Yes. German law lets you pay it in three equal monthly parts, the first when the tenancy starts and the rest with the following rent payments.

### When does the guarantee end?

When the landlord releases you and returns the certificate. Make sure that happens after you move out, otherwise the fee keeps running.

### Can the landlord simply draw on the guarantee?

With the usual form of guarantee the landlord can go straight to the insurer. Good providers check the claim first and give you the chance to object.

### Why use a broker?

Offers differ in rate, minimum fee, claim review and how the contract ends, and we check with you first whether a guarantee makes sense at all. The insurer pays our fee.

## 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-deposit-insurance.php#anfrage

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Your broker: Norman Nammert, trading as NAMMERT. Insurance broker licensed under section 34d(1) of the German Trade Regulation Act. Broker register no. D-C08Q-TOSD4-37. NAMMERT Assekuradeur GmbH is a separate company. It does not arrange your contract.

NAMMERT Assekuradeur GmbH, Karl-Marx-Straße 4, 15711 Königs Wusterhausen, +49 3375 29 12 77, info@nammert.com. Wikidata: Q141141479.