- The law makes you liable unlimitedly for damage and unintentional harm you cause to other people or someone else’s property.
- Third-party liability insurance covers claims for compensation for personal damage, property damage, and monetary loss.
- The sum insured should be at least €10 million. However, policies with a maximum sum insured of €50 million add to your financial safety.
- You can purchase high-performance third-party liability insurance for as little as €5 per month.
- The digital insurance companies Feather and Getsafe offer the best liability insurance for expats in Germany.
What is liability insurance?
Third-party liability insurance is your safety net for all the risks of everyday life. This insurance covers damage unintentionally caused by you or another person insured under your liability policy, including property damage, personal damage, and monetary loss.
Loss categories in liability insurance
Property damage is caused by damage or destruction of other people’s property.
Personal damage is given if the damaging event leads to injuries, health impairments, or the death of people.
Monetary losses are not property damages or personal damages. Insurers differentiate here between genuine and non-genuine monetary losses. Genuine monetary loss is not related to personal or property damages.
The insurance company covers non-genuine financial losses up to the policy’s cover amount. However, some insurance providers cover genuine financial losses only to a limited extent.
Who can be insured with personal liability insurance?
Liability insurance can be taken out for singles and families.
Family tariffs are a household insurance, which covers family members, unmarried partners, and other people living together in the same household. Depending on the insurer and tariff, joint liability insurance is sometimes also possible if the insured persons do not live in the same household.
Unmarried adult children who no longer live at home and absolve their first education after school are always covered by their parents’ liability policy.
Liability insurance also covers people employed by the policyholder on a private basis, such as domestic staff, gardeners, or au pairs, if they cause damage to third parties in the course of their work.
Private liability insurance Germany abroad
If you have taken out a private liability policy, you are covered against claims for damages not only in Germany but also abroad. Personal liability insurance offers worldwide coverage, ensuring you are protected, regardless where you are. In Europe, it is unlimited, but outside Europe, there are often limits between 1 and 5 years. This global insurance coverage prepares you for any situation, providing you with security.
Passive legal protection
Private liability insurance provides passive legal protection in the event of a claim. The insurer checks whether the injured party’s claims are justified and defends against unjustified claims. The insurance company pays then the legal fees.
Rules for the settlement of claims
The following rules apply to the settlement of claims:
- In the event of property damage, the repair costs are reimbursed. In addition, the insurance pays a surcharge for the reduced value of the item.
- In the event of total loss, the insurance will reimburse the current value of the insured item. This is the replacement value of the item, considering wear and tear and age.
- Private liability insurance provides comprehensive compensation for personal damages. Insurance benefits include medical costs, compensation for pain and suffering, loss of earnings, permanent pension payments, and reimbursement of benefits from health insurance, statutory pension insurance or private disability insurance of the injured person.
What does liability insurance cover?
Personal liability insurance covers all third-party damage that may occur in everyday life. However, you need separate traffic liability insurance for any damage you cause with your car. Damage caused by business activities must be covered by a special professional liability insurance. Dog owners may need a special dog liability insurance, which is mandatory for all dogs in several federal states of Germany. However, damage caused by cats and small animals is covered by personal liability insurance.
Compensation through private liability insurance
German personal liability insurance covers virtually all damage that can occur in everyday life. This includes, for example, damage that you cause to a rented apartment and rental property such as a vacation home or a hotel room, damage during events and sporting activities or damage caused by computer viruses. The insurance company also covers damage you may cause as a pedestrian or cyclist in road traffic.
Third-party liability insurance — criteria for selection of the policy
The following aspects are important when choosing a liability insurance policy:
Sum insured
You will receive benefits from your insurance company up to the agreed sum insured. The sum insured should be at least 10 million euros and cover all three areas of the insurance at this level. However, a policy with a sum insured of 50 million euros is clearly better and adds to your financial safety in the event of damage. The difference in cost compared to insurance policies with a lower sum insured is minimal.
Best performance guarantee
Some insurance companies offer the best performance guarantee for their liability insurance and provide then the same benefits as the best liability insurer in Germany.
This guarantee is essential if you have caused a claim, and your insurance company argues that this area of insurance is not covered or that the sum insured is insufficient to settle the claim in full. If you can prove that another insurance company will pay for this damage, your insurance provider will also have to pay, if your policy includes the best performance guarantee.
Insurance against loss of receivables
Good personal liability insurance cover also includes your damage claims, if the individual who caused the damage has no third-party liability insurance and cannot compensate for the damage out of his own pocket.
This clause is particularly critical because private liability insurance is not compulsory, and around 15% of all households in Germany have not taken out such insurance.
Some liability insurers only cover losses from €2,500 if there is no third-party liability insurance or require a legally binding judgment against the person reinsurance companies.
Insurance for damage caused by courtesy
Your liability insurance should also pay out in case of damage caused by courtesy — for example, if you help friends move house and cause damage.
Children before culpability
If you have younger children, your liability insurance in Germany should explicitly cover damage caused by them. Under German law, children up to their 7th birthday are not responsible for damage. In the case of damage caused in moving traffic, children are not liable until the age of 10.
Emerging risks
Your private liability insurance should cover new risks for a certain period free of charge—even if a separate liability insurance policy as a traffic or dog liability insurance is required for this risk. However, such additional insurance cover is only valid for a very limited time.
What does third-party liability insurance not cover?
In principle, private liability insurance only reimburses damages if they were not caused intentionally. Gross negligence, on the other hand, does not justify an exclusion of benefits in reasonable tariffs.
These losses are also not covered by private liability insurance:
- Self-injuries and damage to your property
- Fines and penalties
- Damage caused by breach of contractual obligations
- Any damage, which has to be separately covered by motor vehicle liability insurance, professional liability insurance or dog liability insurance.
How much does third-party liability insurance cost?
The cost of liability insurance depends on the tariff, the sum insured, the number of policyholders, and, in some cases, their age.
Excellent single rates are available from around €5 per month. Family tariffs are slightly pricier, but are always more favorable for insuring several people.
You can take out liability insurance in Germany with or without a deductible. However, due to the low rates, paying an excess with this insurance makes little sense.
According to a study by Stiftung Warentest, the cost of liability insurance varies between less than €70 and over €140 per year, depending on the provider and tariff. Based on the premium amount, no statement can be made about the quality of German liability insurance — in the test, some low-cost tariffs also scored excellently.
Best liability insurance in Germany
In Germany, you can take out liability insurance with established insurance companies or digital insurance providers. An insurance comparison will give you an overview of the benefits and costs of the various tariffs in advance.
We present liability policies from online insurance providers Feather and Getsafe, which are also ideal for ex-pats in Germany. The insurance application and claims are processed entirely online on the providers’ websites. Particularly convenient: all content on the websites and all services are available in English and German. A German residence is a prerequisite for taking out both tariffs. Different other insurances you can take out with the same company.
Feather
Getsafe
Conclusion – is liability insurance worth it?
Third-party liability insurance is absolutely worthwhile and one of the most important insurance policies. It provides comprehensive cover against claims for damages, which, in the worst case, could lead to personal bankruptcy without this insurance cover.
A tariff with a maximum sum insured of 50 million euros is ideal.
Frequently asked questions
In Germany, liability insurance for everyday damages is not mandatory. However, motor vehicle liability insurance as part of car insurance, professional liability insurance for certain professions and partially animal liability insurance for dogs are required by German law.
You jeopardize the protection provided by your liability insurance if you accept claims from the injured party or pay compensation without the written consent of your insurance company.
Personal liability insurance doesn’t have waiting periods. This means you’re covered from signing up, providing immediate peace of mind.
As a rule, liability insurance policies are subject to notice periods of 3 months.
After a claim and in the event of premium increases, you have the right of special termination. The insurer can also assert a special right of termination after a claim.
