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.

Maximum Limit

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.

Deductible

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.

Lost Keys

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

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.

Risky Activities

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!