Kaution insurance in Germany: how a rent deposit guarantee works

Kaution insurance (Kautionsversicherung, also called Mietkautionsbürgschaft or Mietbürgschaft) replaces a cash rent deposit with a guarantee. An insurer or bank guarantees the deposit amount to your landlord, and you pay a yearly fee for it. Your cash stays free, but the fee is gone for good, and the provider recovers any claim it pays out from you. If you are looking for a flat in Berlin, you can join waitlists on Waitly to hear about new offers early.

Last updated: 13 October 2026.

In short

Kaution insurance is a guarantee that protects the landlord, not insurance for tenants. Stiftung Warentest puts the cost at 3 to 5 percent of the deposit a year, never refunded. Your landlord does not have to accept it, and any payout is reclaimed from you. It usually only makes sense as a short-term bridge.

How does Kaution insurance work?

You sign a contract with an insurer or a bank. The provider issues a guarantee certificate (Bürgschaftsurkunde) for the agreed deposit amount, and you hand it to your landlord. Instead of paying the deposit in cash, you pay the provider a yearly fee for as long as the guarantee runs.

If the landlord has a valid claim, such as unpaid rent or damage, the provider pays. For you, it is essentially a way to defer the deposit, with running costs attached.

Cash deposit, deposit account and guarantee compared

A cash deposit is the default. Under § 551 BGB, the deposit can be at most three months' rent excluding utilities, so three months of net cold rent (Nettokaltmiete). You are entitled to pay a cash deposit in three equal monthly instalments, the first at the start of the tenancy. Our guide to the rent deposit in Germany shows how to work out the amount.

With a deposit account (Kautionskonto), the landlord keeps your money at a bank, separate from their own assets, as § 551(3) BGB requires. The interest belongs to you. When you move out, you get the money back with interest, minus any justified claims.

Kaution insurance is subject to the same cap of three months' net cold rent, because it is just another form of rental security. A cash deposit ties up money that comes back; a guarantee ties up nothing, but the fees are lost.

What does a rent deposit guarantee cost?

A rent deposit guarantee usually costs 3 to 5 percent of the deposit per year, according to Stiftung Warentest. For a deposit of about 2,000 euros at a 4.7 percent fee, that is 94 euros a year. Unlike a cash deposit, the fee is never refunded.

With a 2,000 euro deposit and a 5 percent fee, you pay 100 euros a year, so 500 euros over five years, none of which comes back. For a 4,500 euro deposit at the same rate, it would be 1,125 euros. Some banks also charge a processing fee when the guarantee is paid out, so read the contract terms.

Does the landlord have to accept a guarantee?

No. A landlord does not have to accept a guarantee instead of a cash deposit. As the Mieterverein zu Hamburg explains, tenant and landlord can agree that the tenant provides a guarantor or a bank guarantee instead of cash. Without that agreement, the cash deposit applies.

Ask your landlord first whether they accept Kaution insurance, and get the answer in writing. If you buy a guarantee and the landlord then refuses it, you may end up paying fees and a cash deposit at the same time.

Both landlords and providers usually check your credit history. Check what SCHUFA score you need before you apply. With a negative entry, a guarantee is often hard to get, and our guide to renting with a negative SCHUFA entry covers the alternatives.

Pros and cons for tenants

Kaution insurance has one clear advantage for tenants, cash in hand when you move in, and several drawbacks.

Pros:

• You don't need three months' net cold rent in one go when you move in.

• The money stays available for the move, furniture and the first rent.

Cons:

• The yearly fee is lost and adds up over the years.

• Fees keep running until the provider gets the certificate back.

• If the provider pays the landlord, you have to repay it.

• The landlord can refuse the guarantee.

Stiftung Warentest generally advises against Kaution insurance and rent guarantees because they are very expensive for tenants. If you can't raise the deposit when moving in, it considers an instalment loan the cheaper option in most cases. A rent guarantee is at best a short-term bridge.

What happens when you move out or a claim is paid?

When the tenancy ends, the landlord returns the guarantee certificate to the provider once no claims are outstanding. Only then does the guarantee end, and with it the fee. Give the provider your new address so you hear about any claims.

If the landlord claims money under the guarantee, the provider pays and then recovers the amount from you. If you think the claim is unjustified, Stiftung Warentest notes that you have to take action against the landlord yourself to get the money back. With a cash deposit, the landlord has to justify deductions before paying you less.

Our article on deposit deductions explains what landlords may deduct. For deadlines and the refund process for a cash deposit, see our guide to deposit refunds under § 551 BGB.

Kaution insurance or a parental guarantee?

A parental guarantee (Elternbürgschaft) is a private guarantee: your parents or other relatives guarantee your obligations under the lease to the landlord. It costs no fee, but if something goes wrong, the guarantors pay with their own money.

The cap still matters. If the landlord already holds a deposit of three months' net cold rent, Stiftung Warentest says they cannot demand an extra parental guarantee, and a guarantee signed anyway would be invalid. It can be different if your parents offer the guarantee on their own initiative. For the other papers landlords expect, see our list of documents for a rental application.

Frequently Asked Questions

Is Kaution insurance the same as contents insurance?

No. Kaution insurance covers neither your belongings nor damage you cause in the flat. It only replaces the deposit, and you reimburse every payment the provider makes.

Can I switch from a guarantee to a cash deposit during the tenancy?

Yes, if the landlord agrees. Once you pay the cash deposit and the certificate goes back to the provider, the fees stop.

Can a landlord ask for both a deposit and Kaution insurance?

Not beyond the legal limit. Cash deposit and guarantee together must not exceed three months' net cold rent. If the landlord demands more, the agreement is invalid for the excess.

Find a flat in Berlin

Plan for the rental security early so you can say yes quickly when an offer comes. With Waitly in Berlin you can join waitlists and newsletters and hear when new flats become available. Signing up improves your chances, but it does not guarantee a flat.