Insurance costs when selling a house: who pays after the notary appointment?

There are usually several weeks between the notary appointment and the day on which the new owner appears in the land register. During this phase, it is not always clear who will bear the running costs of the property - and, above all, who will bear the risk if damage occurs during these weeks. Building insurance is the most expensive and consequential issue in this transition window, and it is mishandled in almost every second purchase transaction in Nuremberg.

Any owner preparing a sale in the metropolitan region should not leave the transfer arrangements to the standard purchase agreement of the buyer notary. A bank-ready property file has the insurance issue neatly structured even before the first viewing. In the following, we show who is legally responsible in which phase, how the handover actually works in Davis practice and why a free policy check via our network partner LZK Versicherungsmakler GmbH is often the easiest way to prepare.

In a nutshell:** The building insurance is automatically transferred to the buyer when the property is sold. Until the transfer of ownership in the land register, the seller remains liable for the premium and bears the economic risk. The buyer has a one-month special right of termination from the date of entry in the land register.

The legal framework: § 95 VVG and the automatic transfer

With the entry of the buyer in the land register, the existing building insurance is legally transferred to the purchaser. This regulation results from § 95 of the Insurance Contract Act and is mandatory, regardless of whether the parties have agreed otherwise or not. The change of ownership of the insurance cover is therefore not a contractually negotiable point between the seller and buyer, but a consequence of the transfer of ownership.

In practice, this means a time gap. The notary appointment marks the transfer of benefits and encumbrances in most purchase contracts - but the formal transfer of ownership only takes place after the tax office has issued a clearance certificate, the priority notice of conveyance has been entered and the final purchase price has been paid. Experience shows that there are usually six to twelve weeks between notarization and entry in the land register, and considerably longer in the case of inheritance or complex encumbrance regulations.

In this interim period, the seller is still the legal owner and therefore liable for the insurance premium. Economically, however, the risk is often already transferred to the buyer - via the so-called transfer of risk clause in the purchase contract. This discrepancy between legal ownership and economic assumption of the burden is the source of the most expensive omissions when selling a house in Nuremberg.

The decisive key date: transfer of benefits and encumbrances

Every structured purchase agreement defines a specific date from which the benefits and burdens are transferred to the buyer. In Davis practice, this day is identical to the full payment of the purchase price. From this date, the buyer bears the economic burden of the insurance premiums, even if the insurance policy is still in the name of the seller.

In concrete terms, this means that the seller continues to transfer the annual premium to the insurance company because he is listed there as a contractual partner, but invoices the buyer for this on a pro rata basis. For example, if the purchase price is paid on March 15 and the annual premium was debited on January 1 for the entire year, the buyer pays nine and a half months pro rata. This settlement takes place either via the notary as trustee or directly between the parties.

A serious market validation of the transfer regulation is part of the preparation for every Davis & Partner mandate. If you go into the notary appointment without a clear deadline, you risk disputes at the very stage when the transaction should actually be completed. This is not only annoying but, in the worst case, damages the relationship between seller and buyer in a phase in which handover protocols, key handovers and defect issues still need to be discussed.

What happens if damage occurs during the interim phase?

The biggest risk in the interim phase is not the pro rata settlement, but the actual damage. Storm damage in April, water damage at the beginning of June, a fire shortly before the final transfer of ownership - statistically, such cases occur more frequently than most owners assume, especially in Central Franconia with its noticeable accumulation of severe weather conditions since 2022.

If the damage occurs before the transfer of ownership has taken place, the seller reports the damage to their insurance company. The insurance company settles with the seller because the seller is still the contractual partner. However, the buyer benefits economically because he takes over the property at the agreed purchase price - including all values that are restored by the insurance. In this constellation, a complex settlement situation arises between the insurer, seller and buyer, which rarely succeeds without friction without professional support.

It becomes even trickier if the insurance company discovers in the event of a claim that the content of the policy does not match the current condition of the building - for example because a recent renovation was not reported, because the living space is incorrectly recorded or because natural hazard clauses are missing. In such cases, the settlement may be reduced or not paid at all. Anyone selling a property that is currently being marketed should check the policy beforehand - not afterwards.

Davis practice: The insurance issue as part of the bank-ready property file

Proper preparation of the insurance issue is part of the bank-ready property file in every Davis & Partner mandate. Before marketing, we systematically check whether the existing policy matches the current condition and value of the building, whether natural hazard cover is available and whether the policy conditions are still viable compared to the current market.

Our network partner Dejan Zivkovic at LZK carries out this check with an open mind. He covers around 100 insurers and evaluates your policy in a market comparison. In around two out of three cases, he identifies specific optimization potential - sometimes in the premium amount, sometimes in the scope of benefits, sometimes in the cover structure for natural hazards. The check itself is free of charge and non-binding. It does not automatically lead to a switch, but provides you with the data you need to make an informed decision.

This preliminary check is valuable for ongoing marketing in one crucial respect. Buyers today ask specifically about the insurance situation, especially for higher-value properties. Those who can then present an optimized, documented policy negotiate from a position of decision-making maturity. Those who resort to standard answers signal to the buyer that there may still be many unanswered questions in detail. This perception has a subtle but noticeable influence on the price architecture.

The buyer’s special right of termination - and why it’s up to you

Upon entry in the land register, the buyer inherits the existing policy and then has one month to exercise the special right of termination under § 96 VVG. If he cancels within this window, the policy ends at the end of the current insurance year or on the selected effective date. If he does not cancel, the policy continues to run as normal - with all the conditions that the seller had agreed.

For the seller, this phase is economically completed as soon as the last share settlement has been made. Strategically, however, the transfer is only clean when the buyer has had a real choice. If the policy is outdated, underinsured or overpriced, the buyer will notice this in the first claim or the next premium statement - and will remember the sales process that left him with this policy without any indication.

This form of reputation-building handover is part of the discreet negotiation process that owners can expect from a boutique broker. It differs fundamentally from standard house sales, where the issue of insurance is often not even discussed until after the notary appointment. A free policy check as part of the Davis network cooperation with LZK is the easiest way to close this gap.

What you should do right now

If you are planning to sell your home in the next twelve months, the insurance issue is one of the points that can be clarified particularly early on. The check costs you nothing, takes about a week in the first phase and provides you with three specific pieces of information: Is your policy in line with the market? Does it cover the usual natural hazard risks in Middle Franconia today? Does the insured value match the current condition of your building after all previous modernizations?

Even if no sale is currently planned, it is worth checking. Insurance companies have raised premiums significantly in the last three years, while the benefits promised have not developed to the same extent. A market comparison reliably shows whether you are overpaying on your current policy - and whether the expectations you have of the policy will be met in the event of a claim.

The insurance question is at the beginning of every Davis & Partner mandate. In every sale without professional support, it is at the end. The difference determines whether you remain relaxed in the transition phase or solve problems at the very moment when the transaction should actually be completed. For an initial assessment of your policy or a well-founded property valuation by the Davis network, just send us a short message.

FAQ - Insurance for house sales in Nuremberg

**Is the building insurance automatically transferred to the buyer? Yes, with the entry of the buyer in the land register, the insurance is legally transferred to the new owner in accordance with § 95 VVG. A separate agreement in the purchase contract is not required. The buyer then has one month to exercise the special right of termination.

**Who bears the risk between the notary appointment and entry in the land register? Legally, the seller as the registered owner and debtor. Economically, often the buyer from the transfer of benefits and encumbrances, which is regulated in the purchase contract. Damage in this phase is reported by the seller to his insurance company; the buyer usually benefits economically.

**Do I have to cancel my insurance myself? No. Cancellation is the responsibility of the buyer as part of the special right of termination. The seller’s own termination would be premature and would lead to a gap in cover in the event of a claim.

**Can I optimize the policy before the sale? Yes, this is highly recommended. An optimized policy signals diligence to the buyer and reduces the risk of disputes during the transition phase. Via the Davis cooperation with LZK you can obtain a free market check by Dejan Zivkovic.

**What does the policy review via LZK cost? The check is free of charge for you. There are no consultation fees, no commission and no obligation to switch. You decide whether it makes sense to switch.

**How long does a free policy check take? You will receive an initial assessment within one working day. A complete market comparison is usually available within 48 hours. For more complex constellations with multi-family houses or listed buildings, Dejan Zivkovic will schedule an on-site appointment.

**What documents do I need for the inquiry? The insurance certificate of your current building insurance with policy number, living space and year of construction is sufficient for the initial assessment. If you do not have the documents to hand, the address of your building will suffice.