ᐅ House Uninhabitable Due to Neighbor's Fire – Who Is Responsible for the Costs?

Good evening.
Not our house, but my brother’s. Last night, there was a fire in the neighboring house to my brother’s. The fire department woke them up during the night, and they had to leave the house wearing only their nightwear, with two small children. Thankfully, there were no cases of smoke inhalation or other physical injuries. My brother told me that when they left, the house was already completely filled with smoke, and the smoke had penetrated through all the cracks in the walls and floors (an at least 350-year-old historic building).

First of all, big thanks to the Heidelberg fire department… if they had arrived just a few minutes later, it would have been really bad, as these houses don’t have a second escape route.

Today, they were allowed to briefly enter the house with accompaniment to retrieve essential items. The strong smell of smoke inside was immediately noticeable, and worse yet, small soot streaks were visible in many cracks and gaps in the walls and floors. In other words, the smoke really penetrated every corner. We’re not just talking about wiping down surfaces with a damp cloth and being done. Rather, this will likely require renovations lasting several weeks, possibly including replacing floors, and then probably several months in total. If historic preservation authorities get involved, it could take even longer.

Now the question is, which insurance covers what and to what extent? This seems to be much less clearly regulated than with traffic accidents, and my initial online research shows very different information. Are there fixed rules? Or does it really depend on whether the tenant in the neighboring house even has personal liability insurance?

Best regards,
Andreas