Types of insurance in Germany

Types of insurance in Germany

This is an overview of the common types of insurance in Germany, and why they are important.

Liability insurance (Haftpflichtversicherung)

In Germany, if you cause damage to other people's body or property, you must pay reparations1. For example, if you forget to remove the snow in front of your house and someone slips, they can sue you for damages. You are also responsible for the damage caused by your pets.

The value of the damages can be extremely high, and you could be paying reparations for the rest of your life. Even a small accident could bankrupt you. This is why you liability insurance is a good idea. Most Germans (>70%) have liability insurance1.

If someone sues you for damages, liability insurance will cover the legal costs and the reparations. It only costs around 5€ per month, so it's worth it.

Use Tarifcheck to compare liability insurance options. Feather and Coya offer liability insurance for 4€ per month. They are both based in Berlin, and they speak English.

Professional liability insurance

Private liability insurance does not cover your work. If you are a freelancer, you should also get liability insurance that covers the work you do for clients. For example, buildings, websites, medical operations etc. If you make a professional mistake, professional liability insurance will protect you. For some professions, this insurance is even mandatory. If you are an employee, you do not need professional liability insurance.

Related guide: What is Haftpflichtversicherung, and what does it cover?

Health insurance (Krankenversicherung)

Health insurance is mandatory in Germany. If you stay in Germany for more than 3 months, you must get German health insurance. There are two options in Germany: public health insurance (gesetzliche Krankenversicherung or GKV) and private health insurance (private Krankenversicherung or PKV). This guide explains how German health insurance works.

The best way to find the right health insurance is to use a health insurance broker. Their services are free; they get paid by the insurance company when you sign a contract.

Related guide: An introduction to German health insurance

Car insurance (Kfz-Versicherung)

If you drive a vehicle in Germany, it must be insured. There are two types of car insurance: Vollkasko and Teilkasko.

Vollkasko insurance covers the damage to your car and to other cars, even if the accident is your fault. If you destroy your car in an accident, the insurance company will replace it. Vollkasko insurance is usually several times more expensive than Teilkasko.

Teilkasko insurance only covers the damage to other people and vehicles. If you cause an accident, your Teilkasko will pay to fix other people's cars, but it will not pay you to on your own car. If the accident is someone else's fault, their insurance will pay for the repairs on your car.

Some Teilkasko insurances also cover theft and vandalism. Read your policy carefully, and make sure it covers the right things for you.

Use Verivox or Tarifcheck to compare car insurance prices. If you don't speak German, use Joonko instead.

Related guide: Car insurance in Germany

Disability insurance (Berufsunfähigkeitsversicherung)

This translates to "job disability insurance". If you have an accident and can't do your job anymore, this insurance will help you. For example, if you are a surgeon and you lose a finger, this insurance can be useful.

This insurance makes sense if you have people who depend on you, or a mortgage to pay. It costs around 20€ per month for most professions. It's cheap because accidents that prevent you from doing your job are rare.

Use Tarifcheck to compare disability insurance options.

Life insurance (Lebensversicherung)

Life insurance pays money to your family when you die. It's not useful for you, but it's useful for the people who depend on you. If you have people who depend on you financially, then life insurance is really important. Life insurance is cheap when you are young, but more expensive when you get older.

Home contents insurance (Hausratversicherung)

Hausratversicherung insures the contents of your house, up to a certain value. This includes your furniture and all the other movable things in your house. It can also cover things like computers and bicycles.

If you don't own expensive furniture, it's cheaper to insure items individually. For example, you can get bicycle insurance instead of a home insurance that covers bicycles.

Home insurance is not very expensive. For example, Coya charges less than 2€ per month.

Legal insurance (Rechtsschutzversicherung)

Legal insurance covers your legal costs if you sue someone, or if you get sued. It will pay for a lawyer to defend you in court, and for other legal costs. It will NOT cover damages that you have to pay if you lose a case.

Don't forget that liability insurance (Haftpflichtversicherung) already covers the legal cost if someone sues you for damages.