Liability insurance in Germany: you should know this before picking one

It’s a constant fact of life: sh*t happens. Everyone should prepare for random accidents that puts your health, safety & assets at risk. This is where liability insurance in Germany comes in.

When health insurance covers costs due to illnesses or body traumas, liability insurance makes sure you don’t pay the price for the rest. Both are very essential.

At the end of this guide, you will know what it covers and how to pick the right liability insurance Germany for you.

You can also read how I could have saved 3569€ if I had signed up for German liability insurance early. (*suspenseful music starts*)

Liability insurance in Germany: TL;DR

This guide includes a lot of details about the topic but here are the main key points:

• Liability insurance is called Haftpflichtversicherung in Germany. It’s not mandatory by law but you should really get one. Policies only costs a few euros per month, so it’s really worth it.
• Private liability insurance pays for personal injury, property damage and financial losses that you have caused on others. Without them you have to bear such costs yourself. This can get expensive, especially if you hurt people.
• There are policies for single people, families/couples but also animals.
• Unlike a lot of services in Germany, you can switch providers every year, no strings attached. It’s a great way to find better service and pay less.
• GetSafe, Luko or Feather Insurance are English-speaking providers in Germany but it often pays off to compare all contracts on the market.

German liability insurance: a definition

Haftpflichtversicherung. The term refers to the private liability insurance in Germany. It’s a policy designed to cover you against damage claims when you cause an accident/incident. It covers you against 3 different types of damages:

• Personenschäden (person damage): when you injure someone physically.
• Sachschäden (property damage): when you destroy assets, belongings or property.
• Vermögensschäden (financial loss): when that third-party suffers financially, due to the consequences of the accident.

Accidents happen, but without personal liability insurance, you would have to bear the financial risks of those claims alone. You could risk personal bankruptcy after an accident, especially if you injure someone.

Good German liability insurance costs between €50 and €100 per year. Costs calculations (Beitragsberechnung) are based on:

• The extent of coverage (Deckungssumme).
• Whether you’re single/married and have children (Zielgruppe).
• The amount of your deductible (Selbstbehalt).
• Services you want included (Leistungseinschlüsse).

The people has spoken: an impressive 85% of Germany’s residents have this type of insurance!

What is covered by personal liability insurance in Germany?

Broadly speaking, liability insurance in Germany covers damages you inflict on a third-party. Some examples:

1. Damage to persons: during your morning run, you bump into someone who falls and breaks their wrist.
2. Damage to property & financial loss: you accidentally drop your friend’s laptop and they can’t do their freelance work for several weeks.
3. Damage to a person, property & financial loss: travelling to the airport your suitcase rolls in front of a moving tram, causing an accident that injures several people, damages the tram and keeps dozens of people from getting to work.

This last example demonstrates why good coverage is really important; accidents involving public transportation can cost hundreds of thousands, if not millions! There is a consensus to you select an insurance with at least €50 million in total coverage and €10 million per injured person.

Some specific cases may not be covered as standard. In this case, you will need to sign up for additional coverage packages (Zusatzpakete) in order to cover the following scenarii:

• Schlüsselverlust (loss of work or private keys) – This policy covers the cost of replacing the building’s locks, which can get expensive for high-security facilities or large apartment complexes.
• Forderungsausfalldeckung (default on payment coverage) – If someone causes damages to you, but isn’t insured and can’t pay, then your insurance covers the costs instead.
• Tierhalter-Haftpflichtversicherung (pet liability insurance) – This is often required by dog training schools or landlords to cover damages by your pet. In Berlin, this is actually mandatory for dog owners too.
• Passiver Rechtsschutzversicherung (passive legal insurance) – If someone unjustly claims you caused damages and tries to collect, this covers the legal costs for your defense.
• Auslandsaufenthalt (coverage abroad) – This policy often differentiates between EU and worldwide travel.

This is not covered by German personal liability insurance

When you have liability insurance Germany becomes a much safer place, with protection against debilitating costs from an accident. But it’s also important to know which situations are NOT usually covered:

• Liability when driving or in motion (duh), which is instead covered by your car insurance (Kfz-Haftpflichtversicherung)
• Damages to your home, which are covered by a home-owner’s insurance (Hausratsversicherung)
• Situations where family members accidentally injure each other or themselves, which is instead covered by an accident insurance (Unfallversicherung)
• Damages related to pet ownership: insurance required for horses or dogs in some states (Hundehaftpflicht).
• Damages related to home construction. Bauherrenhaftpflicht and Bauleistungsversicherung cover damages to and on your construction site.
• Damages related to property you own: Haus- und Grundbesitzerhaftpflichtversicherung (house and property owner liability insurance).

• Damages related to your job, workplace, volunteer work, or company
• Most extreme sports or risky hobbies
• Fines and penalties, damages resulting from criminal offences
• Injuries to your own body that you (accidentally) inflict on yourself
• Intentionally caused damage
• Damages due to breach of contractual obligations

The people covered under one policy

Most German liability insurance contracts cover only the person signing the contract (Versicherungsnehmer) as standard. Other packages exist to take family and household members into account. This means that if your spouse accidentally damages something while visiting friends, the costs are covered. Pay attention to policy details: some contracts only cover spouses & family members, thereby excluding non-married partners or roommates for example.

It’s another story for children. Legal restrictions for them are a bit different. German law states the following regarding children:

• Children under 7 years old cannot held liable for their actions/damages. In this case, nobody can come after them or you as a parent for compensation. That means you don’t need an extra policy for them.
• Between 7 & 10 years old, there is a grey area where children can be held liable in some cases.
• Between 10 & 18 years old, a child can held liable for their actions. In this case, the responsibility falls back onto you, as a parent.

Please note that the old saying “Parents pay for their children’s mistakes” is not necessarily true in Germany. That’s the only the case if it can be proved that the parents weren’t supervising their children at the time of accident (Aufsichtspflichtverletzung).

If a member of your household is considered unable to account for their actions because of a psychological condition, old age or handicap, the law would also not consider them liable.

Please note that unmarried partners aren’t automatically included the one policy. Their names should specifically be stated on the contract, or they should have their own contracts.

How to find the right provider

If easy sign-up & English is more important

As you can imagine, there are thousands of options out there, which can be pretty overwhelming since everything is in German. If you want a little bit of guidance, transparent pricing and good coverage, all of it 100% in English (also for claims), I would recommend English-speaking liability insurance providers in Germany like GetSafe, Leko or Feather Insurance. Sign-up in a few minutes, get a confirmation right away and use an app to manage your contracts. It’s one of those of new players that don’t make you hate insurance.

If you want to find the best price

If you decide to go shopping on your own however, you can also turn to more traditional comparison platforms like TarifCheck for example.

Before you sign a contract, make sure you know these other common terms:

• Echter oder unechter Vermögensschaden: also referred to as „direkt oder indirekt“- damage to financial loss can happen through theft (direct) or when someone misses work or loses income due to the damages (indirect)
• Schmerzengeld: compensation for physical or psychological damages to a person
• Gefälligkeitshandlungen: compensation for physical or psychological damages to a person
• Beitragsfrei/beitragspflichtig mitversichert: no extra charge for coverage, or only offered for an extra fee
• Begrenzt/unbegrenzt: limited or unlimited policy coverage, check this in the small print
• Allmählichkeitsschäden: long-term damage, such as an injured person needing further treatment after an accident
• Best-Leistungs-Garantie: a best services guarantee is a promise from your insurance company to treat you at least as well as any other German insurance would.
• Forderungsausfall: think of this as extra protection in the case you have suffered damage through a third-party and this person does not have liability insurance to cover you. If you sign-up for this, your provider will close the insurance gap and cover you instead.

How to pay less for your insurance

Apply those tips to save a bit of money:

• Switch insurance every year: The German insurance contract act (Versicherungsvertragsgesetz – VVG) gives you freedom to change insurance providers every year, without any additional fee. Provided your hand in your cancellation notice 3 months before the end of the first contract-term (renewal date), you are free to shop for cheaper or better options. You also have a right to end your contract right-away if your provider raises its prices, without raising its coverage (VVG § 40).
  
• Pay in large installments: Most German liability insurance providers will give you an opportunity to pay with installments (yearly, monthly, quarterly). As a rule, you get a little discount on your contract if you pay for it in one yearly installment.
  
• Have a deductible: By increasing your deductible, you can significantly reduce your contract fees. 150€ is often thrown around in forums & FB groups to achieve that. Without a deductible, you can also report minor damages but the company may terminate your contract as soon as the damage has been paid.
  
• Private liability insurance is a deductible expense in for your tax return in Germany. It’s called a Vorsorgeaufwendung (a precautionary expense)

How to terminate a contract

For the reasons mentioned above, you have the possibility to terminate your contract, provided the timing is right. You also have a special termination right if you are moving out of Germany, or if you have just been compensated during a recent damage (§ 92 VVG).

If you are with a digital provider, you can probably cancel your contract right from the app. If you need templates/letters to achieve this, here are some:

• Use this template in case you want to cancel your contract 3 months before the end of the contract term (tick first box).
• Use this template in case the provider raised its prices (tick second box) or if you have been just been compensated (tick third box).
• Use this template in case you are moving out abroad (tick first box). Indicate your move out date & send a copy of your Abmeldebestätigung with it.

Hope this intro on the topic helped you towards the best liability insurance Germany has to offer for your needs. Don’t hesitate to ask questions in the comments. And here is what happened to me:

Bastien

The price I paid for not having insurance

The night was still young as I was rushing to park my bike in front of my friend’s house. There was a house party and excitement in the air. In the hurry to lock my bike up, I didn’t take time to stabilize it enough and it fell hard onto an old motorbike next to it, which also fell in turn.

Damages weren’t too bad but the motorbike was a rare model; spare parts and workforce don’t come cheap. Goodbye 3569 euros. I still consider myself lucky though, it could have been much, much worse considered I had no liability insurance Germany.

Liability insurance Germany – FAQ

Sources: 1, 2, 3, 4, 5