Here are the most important aspects you should know:
1. automatic transfer of the insurance
In Germany, buildings insurance is automatically transferred to the new owner when a property is sold. This means that the buyer takes over the insurance policy as soon as the purchase contract becomes legally binding. This transition is regulated by law and takes place without any additional measures on your part.
2. duty to inform
As the seller, you are obliged to inform the insurer of the change of ownership. The transfer requires notification of the transfer of ownership to the respective insurer. The notification of the land register transfer or a new extract from the land register documenting the transfer is suitable proof of the transfer. This should be done promptly to ensure that the insurance cover is transferred seamlessly to the new owner and no misunderstandings arise. The insurer then has the option of adjusting or cancelling the insurance policy.
3. right of cancellation of the buyer
The new owner has the right to cancel the existing building insurance within one month of the transfer of ownership. This can be useful if the buyer has other ideas regarding the insurance cover or prefers a different provider.
What you should bear in mind when cancelling your contract:
- Text form (e.g. e-mail, letter, fax) is sufficient for cancellation vis-à-vis the insurer.
- It should include: Name, address of the old and new owner, building address, insurance number.
- Enclose a copy of the land register entry (including the marked date of entry so that the insurance company knows that the cancellation was made in due time).
- Request confirmation of cancellation from the insurer.
The buyer has exactly one month to give extraordinary notice of cancellation of the building insurance taken over. The period begins when the entry in the land register is updated - i.e. when the change of ownership is officially completed. If the insurer cancels the contract, it expires one month after receipt of the cancellation letter.
If the buyer makes use of this right, the insurance shall end at the time when the buyer takes out a new insurance policy.
Only cancel when you have found a new insurance policy!
"If you want to change your existing building insurance as a new owner, you should look for a new provider at an early stage. As soon as the current policy is cancelled and if there is no new insurance yet, the building will be without insurance cover during this time. If damage occurs during this period, the new owner will have to bear all the costs themselves. This can lead to considerable financial difficulties, especially shortly after the purchase of a property." – Jakob Wischhuseninsurance broker.
4. repayment of premiums
If the insurance is cancelled after the sale, the insurer may refund the premiums already paid on a pro rata basis. This depends on the contractual conditions and the time of cancellation. A provision in the purchase contract also provides certainty as to who is entitled to the premium refund. It is worth consulting with the insurer in this regard.
5. existing damage and ongoing claims
The Federal Court of Justice has ruled that, in the case of a property purchase, the person who owns the property at the time of the damage receives the building insurance benefits.
- If a claim occurs after you have been entered in the land register as the new owner, you will receive the insurance benefit.
- If the damage occurs before your entry in the land register, the seller retains the right to the insurance benefit.
If the damage occurred before the registration and transfer of ownership and the seller has collected the insurance benefit, you are not directly entitled to claim these funds. However, you could take legal action against the seller to claim compensation for unrepaired damage, based on the terms of the contract and the principle of good faith.
6. special agreements
It may be advisable to make special agreements with the buyer, especially if the buyer does not wish to take over the existing insurance or plans to cancel it immediately. Such agreements should be recorded in writing and agreed with the insurer.
Conclusion
When a property is sold, the existing building and fire insurance is automatically transferred to the new owner. It is important to inform the insurer of the change of ownership and to inform the buyer of their rights and obligations. Clear communication and timely information to all parties can avoid potential complications. In this way, you can ensure that the insurance cover is continued without interruption or adjusted accordingly.
