As you settle into your new life in Germany as an expat, there are many new processes and procedures to learn. You’ll want to ensure everything is handled correctly (as best as you can!) so you have a strong foundation in your new home. And Private Liability Insurance can help financially protect you and your family.
What is Private Liability insurance?
Accidents happen - whether you break someone’s property, cause medical injury, or cost someone financially. One way to reduce your financial risk is to get insured, like over 80% of Germans are! Private Liability Insurance, a type of insurance that is becoming increasingly popular amongst expats, helps cover consequential losses or accidental damages to others. Basically, it helps protect you from your own actions against others.
Why is Private Liability useful as an expat?
You may not be any more clumsy or accident-prone but you are in a new country with potentially different rules and expectations. In Germany, situations in which you cause financial damage to someone may be handled differently. A high-quality German Private Liability policy may reduce the financial strain your mistake causes. And it can help save that new friendship with the person whose couch you just spilled red wine all over.
In addition to helping avoid awkward conversations with your new German friends, Private Liability Insurance may be required based on your work or as a part of an apartment contract. It is not required insurance - like Health Care - upon entering Germany. But with such a high percentage of Germans having this insurance, it is a common assumption that you too should have it. When accidents happen, whoever you have caused damage to will expect that the damage will be rectified quickly and completely.
What should I look for in my Private Liability insurance?
Private Liability coverage varies widely between brands and products. Look for a policy or company that matches your wants and needs. For example, many companies do not offer English Terms and Conditions (what is included and excluded). If your German is not wunderbar, you may wish to work with a company that has full English support.
Other policy and insurance differences include:
- how much coverage you will have (sum insured)
- the amount you will need to contribute if you submit a claim (deductible)
- and contract lengths.
While the sum insured may seem simple, some companies may also include sub-limits on certain risk events. A sub-limit means that you are only covered up to a certain amount that will be lower than your sum insured. Sub-limits are common for key loss; you may need to pay to have each lock in your apartment complex changed if you lose your key.
If you need to make a claim, some companies will ask you to contribute to the cost in the form of a deductible. This contribution can range from €0 to more than €500. Take the deductible into consideration when purchasing your coverage; can you afford the deductible in the case of a claim?
If you have signed any other German contracts you may have noticed that they can be for long durations and are difficult to cancel. If you fail to cancel within a certain window, you may be automatically renewed. Luckily, many German insurers are beginning to offer more flexible terms for their customers. Some companies even offer daily cancellation. Consider the contract period and cancelation process when deciding what Private Liability policy is right for you.
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Private Liability costs and how to get insured?
The cost of a Private Liability insurance policy depends on several factors including:
- the level of cover selected (Products with less coverage are generally cheaper)
- your deductible
- and your contract duration.
Depending on your requirements, your policy may cost less than what you would spend on a couple of coffees a month. Or 1 of those fancy organic kale and crystal charged juices if that's more your thing.
When you are ready to purchase your liability insurance, you can likely do so online from the company’s websites. Alternatively, you can use comparison websites or brokers. However, keep in mind that the product you get may vary between how you choose to purchase your insurance.
What requirements do I have to meet to be able to take out Private Liability?
The main requirement is that you need to be living in Germany. Otherwise you won’t be able to access it.
What damage is covered by my Private Liability?
With a Private Liability policy, you can expect coverage for general damage. Nothing too specific. If you damaged another person’s property or if they encounter financial damages due to your actions, this individual can sue you to cover their losses. At this point, your liability insurance kicks in. Dealing with these types of claims is not always simple. But with a good insurance company, it can all work out in the end.
Be sure you understand what your insurance company will cover in your new policy. Some companies will only insure specific damages or losses. Others less. This means they might have a certain set of requirements that are met before they will pay out a claim. But yes, as long as the damage is within the designated amount that you agreed with, everything will be fine.
Before signing on the dotted line, work with the insurance company and see what terms and conditions they apply. Sometimes you can negotiate the amount covered. For the most part, your policy will have a strict amount that you can have covered.
What can’t be covered however?
If you purposely damaged an item and there’s proof of the intention, your insurance company will not offer reimbursement. Personal Liability provides coverage when something happens by mistake or accident.
Be aware that your Private Liability insurance will not cover things like:
- injuries to your body
- damages that you caused intentionally
- damages that resulted from criminal offenses that you committed
- professional errors
- damages covered by a vehicle with third party insurance
- damages and fines made due to the breaches of contract.
So while Private Liability in Germany insurance will cover many things, there will be limitations. Most insurance companies will not offer you support in any of the situations above. But you can assess the situation and actively figure out the right approach and what you can do in order to eliminate any possible issues that might arise in that situation.
Do you really need claim payment default cover?
Claim Payment Default Cover is Private Liability insurance, but in reverse. Imagine that you have suffered damages or injury and the person responsible is unable to cover your expenses. Your insurance company will cover you. Most insurers will only do this for damages that are over 2500 euros. Having this extra claim payment default cover is important for many people, especially if you are afraid that others won’t cover your financial losses.
When submitting an incident to your insurance company, some providers will require proof that the damages were inflicted accidentally and you didn’t collude with the other party. Other companies need you to show that you took all the necessary steps to get the reimbursement. The more money you need to be awarded, the stricter the situation will be. But that’s something you will get used to more often than not.
What about families?
Many expats move to Germany with their family; how does this work? Do you need to have a Personal Liability insurance policy for every family member? No. In most cases, your insurance company will have an option to cover your kids and/or partner in the same policy for a small additional fee. Kids will have coverage through your policy while they are completing their studies or training.
That being said, unmarried couples should know damage claims between household members are excluded more often than not. Talk with the insurance company to see what’s actually covered and what they are not covering. This may be an important aspect to your policy that can help you determine the right coverage for you.