Personal Liability Insurance
What Is It?
Privat-Haftpflichtverischerung is personal liability insurance. It pays for accidental harm or damages to other people and/or their property. You might be familiar with this in the context of automobile insurance, but personal liability insurance is far more comprehensive. It covers medical bills, repairs, and replacements when you accidentally hurt someone, break something, or cause unintentional damage to property that doesn’t belong to you. Personal liability insurance also covers damage that is caused by children you are responsible for as well as most pets.
Imagine you are taking a full cart of groceries out to your car. Something happens to distract you – a phone call, a crying child, whatever. You let go of the cart, not realizing there is enough of an incline for the cart to move on its own. By the time you realize it, the cart has knocked over an elderly person, causing them to fall and break a hip and the laptop they’d just purchased. Fortunately, your insurer should pay for that person’s medical bills and a replacement laptop.
Let’s consider another example. You’re visiting a friend who lives in a rented 4th-floor apartment. You set up a load of laundry and then head out for a leisurely brunch. While you’re out, the washing machine overflows, and water covers the hardwood floor of the hallway and living room. It pools in the corner behind the washing machine and starts leaking into wall. Water eventually starts coming out not just in the apartment immediately below, but the other two below that. Your friend’s landlord and the other apartment owners have hefty repair bills. Good news: your insurer will likely cover the cost of replacing the flooring in your friend’s rental apartment and whatever repairs are required in the units below, as well as the cost of alternative housing if the residents have to move elsewhere during the repairs.
Personal liability insurance does not cover everything, though. Penalties, fines, damage to yourself, or damage caused by professional activity aren’t covered. If you damage something intentionally or just lose it, the insurer also won’t pay. Dogs, horses, and exotic animals like snakes require their own pet liability insurance. You’ll need a separate policy for damage you cause when operating a motor vehicle or to a property you are renting.
Why You Need It
It’s clear that personal liability insurance stands to save you a lot of money in cases where your actions unintentionally lead to costly damage. It can mean the difference between filling out a form or undergoing complete financial ruin! The vast majority of German people have personal liability insurance for just this reason.
It’s also relatively inexpensive – standard policies will only set you back €40–60 per year as a single person, and family policies are also reasonably priced. Even if you never have to make a claim, that’s surely a reasonable price to pay for peace of mind!
Better yet, the liability insurer does more than just pay for damages. The insurance company will also take responsibility for determining whether and to what extent you are in fact obliged to pay damages in a particular case and serve as a defense against unjustified or excessive claims for damages. That can definitely come in handy as a foreigner in Germany. Join any Facebook group or forum where expats talk about issues with landlords and you’ll find plenty of examples of unjustified or excessive claims! Fortunately, your insurer will take on all necessary negotiations and communication (and potentially, even legal proceedings!) with the party in question after you file a claim.
Finally, if you are applying for a residency and/or work permit, personal liability insurance is obligatory. You will be required to show proof that you have Haftpflichtversicherung along with your application.
What to Consider
There are some special features of personal liability insurance that you should look into before signing a contract.
The maximum limit, or Deckungsumme, is the amount that the insurer agrees to pay up to in the event of a claim. Since you have unlimited liability according to the law, it’s advisable to take out the highest possible coverage offered. The contribution differences are generally quite small. Saving €10–20 a year is hardly worth the risk of being on the hook for additional thousands or even millions! The sum insured should be at least €2 million for personal damages and €1 million for property damage, but coverage up to €5 million is quite affordable.
Some policies specify that damages will only be covered after a deductible, or Selbstbeteiligung, has been met. Be sure to check whether your policy covers all damages or only those over a certain amount.
As previously mentioned, the loss of property is generally not covered by personal liability insurance. If your policy include key loss, or Schlüsselverlust, then your insurance company will cover the costs not only for replacing the keys, but if necessary, for replacing the entire locking system in the building, and potentially even temporarily guarding the building.
Bad debt coverage, or Forderungsausfall, provides back-up insurance in case you are injured or have damage caused by someone who is uninsured. Not all personal liability insurance policies include this, but it’s well worth finding one that does. For example, if an uninsured cyclist knocks you off your bike, causing you to hit your head and suffer a concussion that requires weeks of treatment without being able to work, your insurer will cover your medical bills and loss of income.
There are a variety of special activities that might require special coverage. If you do volunteer work with children or if you enjoy surfing or flying drones, you should check to make sure you get a policy that will provide coverage in the case of damages caused while doing so.
How to Get It
You can easily type “Privat-Haftpflichtversicherung” into your favorite search engine and find plenty of companies offering policies and online applications. To help you wade through the many options it’s best to use a comparison service like Check 24. You start by specifying whether the policy will be just for you or whether it should include a partner or kids. Then you enter your birth date, postcode, and decide whether to take the recommendation of the “Stiftung Warentest” – and you absolutely should, since this weeds out policies that don’t provide essential coverage (but tempt people with lower rates). Thereafter you can filter for policies that offer particular features that matter to you.
Certain companies specialize in offering insurance to expats (more specifically, visitors, temporary residents, and people who have been living in Germany less than five years). Their focus on expats gives you the advantage of a website and customer service in English – and maybe even a copy of your policy in English as well. Feather and Care Concept are a couple of examples of such companies.
If you’d like a more personal touch, consider visiting a financial advisor. Many financial advisors in Germany work purely on a commission basis, which means there is no up-front cost to you for a consultation. When you buy a product (such as a personal liability insurance policy), they receive a commission from the company. You can ask for an English-speaking advisor from a company like MLP, OVB, or Tecis.
No matter what route you choose to take, the bottom line is that any personal liability insurance is better than none, and sooner is much better than later. After all, you never know when a careless moment might land you in financial difficulty. Hopefully this article will help you get covered!