Liability insurance (Haftpflichtversicherung) is one of the most important types of insurance after health insurance. Most Germans have it, and for good reason. This guide explains how German liability insurance works, what it covers, and how to choose the best liability insurance for your needs.

What Does Liability Insurance Cover?

Liability insurance covers damages and injuries you cause to other people. For example, if your washing machine breaks and floods your neighbor’s apartment, causing thousands of euros in damage, liability insurance will cover the cost of repairs. Without this insurance, such expenses could bankrupt you.

Private Liability Insurance (Privathaftpflichtversicherung) Covers:

• Damage to the Apartment You Rent: Covers damages to doors, floors, and walls but not your personal belongings. For instance, if your washing machine floods your rented apartment and damages the wooden floor, the insurance covers the repairs.
• Damage to Other People’s Property: If you accidentally damage someone else’s property, like sending a virus that crashes their computer or scratching a car with your bicycle, the insurance covers the repair costs and legal fees.
• Damage Caused by Your Family: It covers damages caused by your spouse and children (over six years old) until they finish their studies.
• Injuries to Other People: If you accidentally cause someone to trip and injure themselves or if you hit someone with a ball in the park, the insurance covers the medical and legal expenses.

Additional Coverages May Include:

• Lost Keys: If you lose your apartment keys and the landlord needs to replace the locks for the entire building, the insurance covers this cost.
• Damage to Rented or Borrowed Items: Covers damages to things you rent or borrow, like breaking a couch in a furnished apartment or damaging a hotel room.
• Damage While Helping a Friend: If you help a friend move and break their furniture, some policies cover this.
• Other People’s Insurance Not Paying: If someone else injures you and cannot pay for the damages, your liability insurance will cover it.

What Liability Insurance Does Not Cover:

• Damage to Your Own Things: For personal belongings, you need household insurance (Hausratversicherung).
• Business Activities: For business-related damages, you need professional liability insurance (Betriebshaftpflichtversicherung).
• Damage Caused by Children Under 7: Most policies do not cover damages caused by very young children without additional coverage.
• Pet-Related Damages: Dog owners need separate dog liability insurance (Hundehaftpflichtversicherung).
• Car Accidents: Covered by car insurance, not personal liability insurance.
• Legal Disputes: Legal insurance (Rechtsschutzversicherung) is required for legal disputes.
• Piracy and Copyright Infringement: Liability insurance does not cover illegal downloads.
• Locking Yourself Out: This is generally not covered by liability insurance but sometimes by household insurance.

Do You Really Need Liability Insurance?

Yes, liability insurance is highly recommended. While it is not legally required, it protects you from potentially ruinous financial claims. A minor mistake could result in a lawsuit for millions of euros, and liability insurance can prevent such financial disaster. Approximately 83% of German households have liability insurance, making it the second most important insurance after health insurance.

How Much Does Liability Insurance Cost?

Liability insurance is quite affordable, usually costing less than €5 per month or around €60 per year. You can often get a discount if you bundle multiple insurance policies with the same provider.

Choosing the Best Liability Insurance

Choosing the right liability insurance involves several steps:

1. Assess Your Needs: Determine the coverage you need based on your lifestyle, family situation, and potential risks.
2. Compare Policies: Look for policies that offer comprehensive coverage, including optional coverages like lost keys or damage to rented items.
3. Read Reviews: Check customer reviews and ratings to see if the insurance company has a good reputation for paying claims.
4. Understand the Coverage Limits: Ensure the policy covers at least €10 million in damages to other people and €300,000 in damages to the apartment you rent. Worldwide coverage is also advisable.
5. Consider Additional Features: Policies that cover lost keys and rented items can save you significant costs in the event of an accident.

Important Coverage Features

• Minimum Coverage Amounts: At least €10 million in damages to others, €300,000 for rental damages, and €50,000 for computer-related damages.
• Worldwide Coverage: Ensures you are covered anywhere in the world.
• Coverage for Rented Items: Essential if you rent furnished apartments or frequently borrow items.

Tips for Lowering Your Insurance Costs

• Pay Annually: Annual payments are usually cheaper than monthly payments.
• Combine Policies: Bundle liability and household insurance for discounts.
• Choose a Higher Deductible: A higher deductible can lower your premiums, but ensure it’s an amount you can afford to pay out-of-pocket.
• Tax Deduction: Liability insurance premiums are tax-deductible in Germany.

Additional Types of Liability Insurance

• Professional Liability Insurance: Protects freelancers, tradespeople, and business owners from job-related liability claims.
• Dog Liability Insurance: Mandatory in some regions and covers damages caused by your dog.
• Car Liability Insurance: Included in your car insurance and covers damages caused while driving.
• Legal Insurance: Provides access to legal services and covers legal fees for disputes.

Conclusion

Liability Insurance is a critical safety net that protects you from financial ruin due to accidental damages or injuries caused to others. It’s affordable, essential, and widely recommended in Germany. By choosing the right policy with adequate coverage, you can ensure peace of mind and financial security. If you need help selecting the best liability insurance, consulting with an expert can provide personalized advice and options tailored to your specific needs.

We at Culpeck will be happy to help you find a suitable policy for you. Fill in our Quotation Form and you will receive the best offers by email. This is completely non-binding for you.