Essential insurance types for beginners in Germany

Dear customer,

The following is a short review of the various insurance-types available in Germany.

This survey does not replace a personal consulting, nor does it include all the aspects of the surveyed insurance.

However first, some important remarks on insurance law in Germany:

1. Every insurance is automatically extended, even if the duration specified in the contract is only one year.
2.  In order to terminate the insurance, one has to inform the insurance agency three months in advance in writing.
3. Upon leaving Germany (proof of leave required) – one can cancel the insurance with a termination date as the day of departure. One will then usually receive a full reimbursement of the amount that would have covered the remaining period.
4. German insurance agencies insure only those who live in Germany and have the registry form called the ‘Anmeldung’. Most German insurance agents are unaware of this fact and will not verify this important detail when offering you an insurance policy. Please note than in case of damage and the insured does it have this form, the insurance company might deny the claim and not activate the insurance.

1. Private third party insurance

This is one of the most important insurances available. German law determines that in case of damage to a person or property by any third party (i.e., any stranger, anyone who does not live under one´s roof, etc.), one has to amend the situation and/or compensate in case of irreversible damage (for example, bodily injuries or death).

A classic example to stress the important of this insurance is as follows: imagine a situation when a leak from a washing machine in one apartment causes the water that run out to go through your floor and reaches the apartment underneath you, causing water damage there. You will owe the neighbor the replastering and repainting of the damaged area. However, the property owner of the building itself might also file for compensation, for example, if the building has to be heat or bellow-dried.

Further examples? You walk down the street and accidently knock down a bicycle rider who was legally using the road assigned for bike and cause him physical damage. If the accident was your fault, you shall be required to cover the costs for the bike rider´s medical care and maybe even a life annuity in case of permanent damage or handicap.

The personal third party insurance covers one’s liability and one’s family members’ liability as bicycle riders on the road: any damage due to an accident caused by the insured individual shall be covered by the insurance (this insurance does not cover any damages that occurred while the insured person was driving a motored vehicle). In the same way, the insurance will cover wear and tears in a rented apartment.

The insurance does not cover any cases of damage between family members who live together.

The insurance will generally only cover damage that is proven to be caused by the insured person. Inattention is not covered by the insurance.

Civil servants and public workers enjoy an expansion of this insurance that protects them from mistakes made while on the job (for example, as a clerk at the land registry, one forgot to insert a note of conveyance and because of that, the apartment was sold twice).

Freelancers, business owners and self-employed are also recommended to get a professional liability insurance. This insurance is not necessarily expensive and it covers any damage caused to clients or patients due to professional error, failing to follow authorities’ directives, product liability, etc.

Property owners who rent out the property they own are recommended to get an add-on that will cover damage to the tenants, their visitors, any stranger on the property, etc. Here again, the insurance will be activated only if full responsibility of the insured person for the damage has been proven.

The cost of the private third party insurance is 43 EUR per year for an individual and 63 EUR for a family.