Replacement vs. Actual Cash Value for Tenants in Germany

As a tenant in Germany it is important to know whether your household or liability insurance will reimburse replacement value or actual cash value in case of damage. Replacement value generally covers the costs to acquire an equivalent new item, while actual cash value accounts for age and wear and therefore pays less. Which rules apply depends on the insurance contract, lease obligations and statutory provisions. In disputes, §§ 535–580a BGB may be relevant, as well as civil procedure rules for actions before local courts or regional courts ^[1][2]. This article explains practical steps, tenant-focused examples and names the official forms that can help in disputes.

What is the difference?

In short: replacement value covers the cost of a new purchase; actual cash value deducts depreciation. For tenants this can mean the difference between full replacement and a partial payout. Older, used furniture often leads to a lower claim.

• Replacement value: replacement by an equivalent new product.
• Actual cash value: payout reduced for age, wear and tear.
• Insurance contract: some policies pay only actual cash value, others offer replacement value for newer items.

Which insurance pays what?

Household insurance usually reimburses stolen or destroyed tenant belongings; private liability covers damage you cause to third parties (including the landlord). Whether replacement or actual cash value is paid is determined by the respective contract clause. If the landlord claims compensation for damage, liability insurance may be relevant. Also check for possible co-insurance through the landlord or mandatory contractual clauses in the lease.

Practical example

A two-year-old sofa is damaged by water. Your household insurer examines the case: under a replacement value clause you receive the new price of a comparable sofa; under actual cash value you receive a reduced amount after depreciation.

• Replacement: full payment for a new purchase.
• Actual cash value: payout based on depreciation tables or expert opinion.

Forms and legal routes (brief overview)

Relevant official forms usually concern court proceedings if a dispute with the insurer or landlord cannot be resolved amicably. Typical forms and procedures include:

• Lawsuit/Eviction claim: when a landlord sues for compensation or eviction; procedures under civil procedure law before local or regional courts.
• Payment order (Mahnbescheid): a formal application to initiate the payment order procedure.
• Claim form to the insurer: the insurer's internal damage report form (check your policy for exact designation).

Specific official templates and forms (e.g., payment order, complaint forms) are available on justice portals and court websites; see the Help section of this article for direct official links. For court steps, the local court (Amtsgericht) is usually the first instance for tenancy disputes ^[2].

What tenants should do in practice

1. Document the damage immediately with photos and date.
2. Collect receipts, purchase records or price lists to prove replacement value.
3. Report the damage in writing to your household or liability insurer.
4. If denied or partially paid, file a written objection and note deadlines.
5. If necessary: seek advice and consider filing a lawsuit at the local court.

FAQ

Which has priority: the lease or insurance conditions?

Insurance conditions determine the scope of compensation; the lease governs obligations between tenant and landlord. Both can be relevant, for example when the landlord seeks reimbursement or duties have been breached.

Can I object to an actual cash value payout?

Yes. Submit a written objection, provide evidence for replacement value and request a clear calculation of deductions. If refusal persists, legal advice can be helpful.

Who decides in disputes?

If no agreement is reached, the competent local court decides; higher instances like the regional court or Federal Court of Justice may be involved for legal questions ^[3].

How-To

1. Documentation: Document the damage immediately with photos and date.
2. Collect receipts: Gather purchase receipts or price offers for comparable new items.
3. Report: Notify your household or liability insurer in writing.
4. Ask for reasons: Request a written explanation if the insurer pays actual cash value only.
5. Objection and legal review: File an objection and consider legal steps if necessary.

Help and Support / Resources

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

1. [1] Bürgerliches Gesetzbuch (BGB) – Gesetze im Internet
2. [2] Zivilprozessordnung (ZPO) – Gesetze im Internet
3. [3] Bundesgerichtshof (BGH) – Decisions