Replacement vs. Actual Cash Value 2025 for Tenants in Germany

Tenants in Germany often face the question whether replacement value or actual cash value applies to damages and how this affects their liability and household insurance. This article clearly explains what both terms mean, when each valuation is common, what consequences arise for tenants regarding renovation, repair costs or full replacement, and what rights you have against the landlord. You will receive practical steps for reporting a claim, advice on preserving evidence and information on deadlines and forms. The goal is that you can confidently decide whether a claim exists, which documents are needed and when a proceeding at the local court becomes sensible. We refer to the relevant sections of the BGB and official sample forms for tenants.

What does replacement value and actual cash value mean?

Replacement value describes the price to procure an equivalent new item; actual cash value reduces that amount by wear and age. For tenants an example of a broken washing machine shows how the payout differs: with replacement value the insurer covers the cost of a new machine, with actual cash value only a proportionally reduced replacement budget. The specific regulation depends on your insurance contract and the conditions in the damage case.

Effects on liability & household insurance

Whether replacement or actual cash value is paid affects the reimbursement amount and possible top-ups. Check your policy and inform the insurer early so that appraisers and deadlines are respected.

• Clarify the damage amount (amount) and check whether replacement or actual cash value is agreed.
• Report the damage to the insurer (form) within the deadline stated in the contract.
• Collect photos and receipts (photo) and create a damage log with date.
• Have urgent repairs carried out (repair) and keep invoices.

Forms and court procedure

The legal basis includes mainly the BGB for tenancy rights and the ZPO for court procedures. Specific provisions on duties and termination are in the BGB sections §§ 535–580a^[1]. For lawsuits and eviction claims the Code of Civil Procedure applies^[2], and tenancy disputes are heard in first instance at the local court^[3]. Typical forms and procedures:

• Termination letter (no nationwide mandatory form): Use a written notice with date, signature and contract reference; example: proper termination for personal use.
• Lawsuit form for eviction (local court): Used when a landlord enforces eviction; tenants can present counterclaims or propose installment payments and should attach all evidence.
• Damage report to insurer: Send a written damage report with date, description, photos (photo) and cost estimates to start the process.

FAQ

When does the insurer pay replacement value instead of actual cash value?

That depends on the insurance contract: some policies cover replacement value within a certain period after purchase, others always pay actual cash value.

Do I have to agree repairs with the landlord first?

For damages affecting the rented property, inform the landlord immediately; urgent repairs to prevent greater damage may be arranged and costs documented.

How long do I have to report a damage?

Contractual deadlines are in your policy; report damages as soon as possible to avoid disadvantages.

How-To

1. Document: Immediately take photos (photo), note the date and name witnesses.
2. Report the damage: Send a written damage report to your liability or household insurer (form).
3. Arrange repairs: Have urgent damages repaired promptly (repair) and keep invoices.
4. Appraiser: If needed, request an independent appraisal and give the insurer access.
5. Consider legal action: If problems persist, seek advice or bring a case at the local court (court).
6. Contact support: Seek help from local advisory services or legal professionals.

Help and Support

• Bürgerliches Gesetzbuch (BGB) – Gesetze im Internet
• Zivilprozessordnung (ZPO) – Gesetze im Internet
• Federal Court of Justice (BGH) – Official website

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1. [1] Bürgerliches Gesetzbuch (BGB) – Gesetze im Internet
2. [2] Zivilprozessordnung (ZPO) – Gesetze im Internet
3. [3] Federal Court of Justice (BGH) – Official website