5 reasons why expats don’t get liability insurance

Expats in Germany often overlook private liability insurance (Haftpflichtversicherung). In 2014, 85% of the German population was covered by this insurance. This post explores the why foreigners in Germany end up without personal liability coverage.

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I’m an expat in Germany and have been living here since 2014. I came to Germany as a student and now I work as a freelancer in Bavaria. One of the things my fellow international friends can totally relate to - but makes my  German peers gasp in disbelief and horror - is that I do not have any private liability insurance. The usual response is “What?!”, “You like to live dangerously!”, “That’s very risky”, or something along those lines. Some just faint. The thing is, there are oodles of reasons why many expats do not end up getting liability insurance when they arrive in Germany (even though they’ve all heard the tales of woe about those who don’t have it). Here are some of the reasons why many expats do not get liability insurance (until it’s too late).

5 reasons why expats don’t get liability insurance

They’re unsure what liability insurance is for

Liability insurance doesn’t exist in India, where I was raised, nor does it exist in many other countries around the world. And even if it does exist, it’s nowhere near as big a deal as it is here. A lot of expats don’t understand the significance of liability insurance because they’ve never had to deal with the consequences of not having it in their native country. So why get it now? It’s not like you’re suddenly going to become clumsier or more accident-prone after moving to Germany. Although, if you develop a liking for German beer, this may well be one of the side effects. In short, many new expats in Germany treat private liability insurance as a trivial issue. By the time they realise its importance, it’s often too late and the damage has been done.

They don’t want to face even more bureaucracy

Expats in Germany already deal with tons of compulsory bureaucracy in their early days. Going through long-winded visa processes, house hunting, finding the right health insurance plan or searching for a job in a foreign land are already stressful enough. And that’s all before you even start learning the wonderful language that is German. Many of them just avoid getting caught up with anything that involves even more paperwork and complicated contracts.

And speaking of complicated contracts…

They find German contracts too difficult to understand

Many service providers in Germany understandably write contracts only in German and legal mumbo-jumbo can be hard enough to understand in your native tongue, let alone in a foreign language. Even when a foreigner knows German quite well, it is often not good enough to grasp complicated insurance, financial and legal terminologies. And German companies just love putting the “gut zu wissen” (good to know) section in tiny writing right at the end of the 600-page document. Agreeing to terms and conditions that you don’t fully understand is asking for even more trouble. All it takes is one misinterpretation and you’re committed to an expensive contract that you didn’t want in the first place - and then it turns out not to be the right insurance protection after all. Ironically, many foreigners in Germany get caught up in a vicious circle. They avoid signing up for liability insurance to avoid any contractual issues BUT, in the process, open themselves up to even more potential problems by not having liability insurance.

This leads to our next challenge...

They have NO idea what a good liability insurance policy looks like

How are expats supposed to know what a good comprehensive policy covers if they can’t get accurate information from official sources - in a way they fully understand? As a result, some are left misinformed. Others are misled by conflicting details in their own expat circles or on online forums. They don’t know what kind of coverage is best for them, or which information source to trust. In the end, many foreigners just shrug and leave it be. They tell themselves it’s one of those things they’ll get around to later.

They don’t have long term plans to stay in Germany

This is probably a very important reason why expats don’t bother with liability insurance. Many foreigners in Germany are sent on work assignments which only last a couple of years or so. Some are students enrolled in bachelor’s or master’s programmes, others are here for internships. For them, it’s simply too much hassle to go through all of the above for something they see as an additional bureaucratic burden while adapting to their brand new, temporary life in Germany.

As you can see there are plenty of reasons why expats in Germany avoid signing up for liability insurance. Another good one could be to get out of having a relationship with a German - just tell them you don’t have liability insurance and watch them head for the door. Not that all Germans are so fussy about this stuff, of course. (Maybe.) However, all of these reasons are just minor inconveniences - especially when compared to the serious problems that anyone living in Germany could face due to the lack of liability insurance.

Accidents happen. But the financial cost is avoidable.

Let’s face it - to err is human. You can be as careful as possible but accidents can happen anywhere, any time. One of these days, you’ll drop someone’s phone while taking their photo, spill wine on someone’s laptop, run into someone’s bike or burn someone’s house down. It could happen, right? In Germany, you can end up bearing the significant financial cost of any accidents that you’re involved in. This can run into hundreds of thousands of euros if not more - enough to throw someone into a lifetime of debt. Personal liability insurance can protect you from horrendous situations like this. Just think of how amazing you’ll feel knowing you can do millions of euros worth of damage! Go, smash that phone, fling that wine, ram that bicycle, strike that match…
(Disclaimer: Luko does not actually recommend that you do any of these things. Also, Luko does not cover any intentionally inflicted damage.)

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There are expat-friendly, transparent insurance providers out there

For me, some of the biggest reasons for not getting private liability insurance were too much paperwork, complicated or conflicting information and general lack of knowledge about such insurance policies. However, it is possible to get simple, easy to read, comprehensible information on various types of liability insurance in Germany - whether private, pet or home contents. Like many other people, I’m far more likely to commit to an insurance policy for the long term when I know exactly what I’m paying for. Always remember, whether you’re in Germany for a short- or long-term stay, it’s much better to have liability insurance and not need it than need it some day and NOT have it.

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