What is a rental deposit insurance?

What is a rental deposit insurance?

Rent deposit insurance is a possible form of financing a rent deposit in the real estate industry. If you rent an apartment, you usually have to give a certain amount (usually several times the monthly rent) to the future landlord as security. This is also understandable. The landlord would like to be able to repair the damage quickly in the event that his home is damaged. If the tenant should become insolvent and no deposit is available, the landlord could remain on the costs and (if at all) only come after lengthy court proceedings to his money.

With a rental deposit insurance a service provider takes over the provision of the deposit. The landlord then no longer has this with him, but the insurer is liable for any damage incurred by the landlord up to a certain amount. The tenant pays a regular premium to the insurer to make use of this service.

For whom are rental deposit insurances useful?

Both the tenant and the landlord benefit from rent deposit insurance. In a nutshell: the rent deposit insurance service reduces the risk for tenants and landlords.

Advantages for the tenant

The tenant does not have to pay a deposit. This can mean a high financial burden, especially in the relocation phase. New furniture, transport costs, etc. are a drain on your wallet. To burden these expenses additionally by a high deposit can plunge the tenant into financial difficulties.

Through the rent deposit insurance also rental objects can come into reach, which were not financeable so far due to their high deposit requirements.

Rent deposit insurance can be easily taken out and dissolved (e.g. in the case of a move).

Advantages for the landlord

The rental deposit insurance is not obligatory for the landlord, i.e. he does not have to accept it, but can insist on a rental deposit. However, there are important advantages for the landlord.

The landlord does not have to keep a separate account for the rent deposits. He may not mix the deposits of his tenants with the house accounts by law, but must keep these separate. By the use of a rent deposit insurance this administration expenditure is void, which saves time and money.

The number of prospective buyers of a flat tends to rise, since now also prospective buyers come, who were deterred so far by high rent deposit, can afford a rent deposit insurance however.

The landlord can, in the case of the demand of the rent deposit, his requirements with the insurer make valid. This happens usually more smoothly, than opposite a tenant, who enjoys straight by the law special protection.


The rent deposit insurance is advantageous for both the tenant and the landlord. In any case, it is worth comparing the conditions and prices of the various providers on the market.