Replacement vs Actual Cash Value for Tenants in Germany

As a tenant living in a shared flat in Germany, you often face the question whether replacement value (new-for-old) or actual cash value is the better basis for your household or liability insurance. The decision affects how much you will actually be reimbursed in the event of a claim, which premiums you pay and what documentation the insurer requires. This article clearly explains the terms replacement value and actual cash value, shows pros and cons for flatmates, provides a step-by-step guide to calculations and documents practical examples of how repairs, repair costs and replacements are settled. At the end you will find notes on important deadlines, official forms and where tenancy disputes are adjudicated. I also explain how replacement value matters for shared items in a flat and how to collect receipts correctly to enforce claims.

What replacement value and actual cash value mean

Replacement value means that a damaged item is replaced at the price of a brand-new equivalent. Actual cash value takes age and wear into account and pays only the reduced current value. For tenants this can mean the difference between full replacement or only partial reimbursement.

When replacement value is sensible

• Expensive electronics and furniture you want fully replaced.
• When the flat has communal furnishings and full replacement is necessary.
• If the premium for replacement value economically covers the advantage.

When actual cash value is sufficient

• For older items with low replacement value where replacement is uneconomic.
• If the premium savings for actual cash value exceed the potential difference in a claim.

Practical steps before signing

• Read your policy carefully and clarify whether replacement clauses include automatic surcharges.
• Inventory flat items with photos, receipts and age information.
• Compare offers from different insurers for coverage and deductibles.

Note that the German Civil Code (BGB) describes basic tenancy obligations which can influence liability issues^[1]. If in doubt about policy interpretation or in disputes, courts up to the Federal Court of Justice (BGH) may decide^[2].

Report a claim: step by step

1. Report the claim immediately to your insurer and inform affected persons in liability cases.
2. Secure evidence: photos, invoices, witnesses and a short damage description.
3. Record dates, deadlines and all contacts at the insurer.
4. Submit required forms; official templates are available from competent authorities if needed^[3].

Common mistakes to avoid

• Submitting missing or incomplete receipts.
• Failing to coordinate with flatmates about communal property.
• Signing reimbursement agreements without careful review.

Frequently Asked Questions

Will my liability insurance pay replacement value for damaged items?

That depends on your policy; many personal liability insurances pay only actual cash value, while household insurances may offer replacement value options.

How should I document shared-flat property best?

Take photos, keep receipts and maintain an inventory list with age and purchase value.

Where are disputes legally resolved?

Tenancy disputes are usually heard at the local court (Amtsgericht); appeals go to the regional court (Landgericht) and possibly the Federal Court of Justice (BGH).

How-To

1. Check your current insurance policy for replacement or actual cash value clauses.
2. Create an inventory of the flat with photos and receipts.
3. Compare annual premiums and possible deductibles.
4. Decide together in the flat and record the choice in writing.
5. In case of damage: report immediately, submit evidence and observe deadlines.

Help and Support / Resources

• Bürgerliches Gesetzbuch (BGB) and other statutes
• Federal Court of Justice (BGH) – decisions and guidance
• Federal Ministry of Justice – forms and information

1. [1] Gesetze im Internet - BGB §535
2. [2] Bundesgerichtshof (BGH)
3. [3] Bundesministerium der Justiz (BMJ)