Liability insurance is one of the most popular kinds of voluntary insurance in Germany. Personal liability insurance covers damage done to a third person or their property and makes you liable for the damage done with all your private assets.
When it comes to personal liability insurance, Germany makes it mandatory for all employees, residents, citizens, and expats in Germany to take on liability insurance for motor vehicles. Although, other types of liability insurance also exist.
Suppose you have moved to Germany in a job-related capacity as an expat, or are planning to spend more than 6 months in Germany. In that case, you will need to understand some things about liability insurance. This article will tell you everything you need to know, outlining how personal liability insurance in Germany works and what kinds of liability insurance plans you can opt for depending on your specific needs.
What is Personal Liability Insurance?
Third-party liability or personal liability insurance is the least expensive yet probably the most important type of insurance in Germany. As a German resident or a foreign national working in Germany in some capacity for an extended period, this is the most vital type of insurance you will require.
Personal liability insurance will financially cover you or an insured member of your family in the unforeseen event that you commit an act for which a German court would most probably consider you ordinarily negligent.
Regarding personal liability insurance, Germany’s laws state that there is no ceiling on the potential level of damages that an individual could have awarded against themselves due to an act that they have committed.
This includes acts of ordinary negligence, which refers to any act that was committed innocently yet carelessly. Moreover, this includes any misdeeds committed by your dog or your pet horse that caused damage or loss to someone else or their property.
The term ordinary negligence is a catch-all term that can refer to many different types of acts. It could be a casual matter of damaging somebody else’s property by accident, such as accidentally knocking over an expensive vase, or something more serious, such as causing a traffic accident by not crossing the zebra crossing or causing someone to sustain a bodily injury due to a sports-related accident.
Third-party or personal liability insurance is intended to give the policyholder much more than simple peace of mind. The main intent is to cover financial losses and ensure that you are still financially secure following the accidental damage or loss caused by you to someone else or their personal property.
For this very reason, personal liability insurance is strongly recommended for all German residents and expats and is contractually required for many people, such as those renting property.
How Does Personal Liability Insurance Work in Germany?
Third-party or personal liability insurance claims can require a very high level of cover, depending on the nature of the negligence or accident and the extent of the damages or losses sustained by the third party.
Moreover, saving too much money in premiums is not recommended by taking out a cheap personal liability policy.
This is because when accidents happen due to carelessness or negligence, they usually happen very fast, and even a little bit of carelessness at the wrong time can be enough to cause you an enormous financial burden.
For this reason, it is normally recommended that you try to pick a good personal liability insurance policy, one that will cover a substantial portion of the most significant type of potential damages to a third party.
Notably, regarding personal liability insurance, Germany’s insurance companies will not provide cover for the driver of an automobile, an airplane pilot, a boat sailor, or even a hunter. For accidents caused by negligence in any of these activities, a separate insurance policy for each kind of activity listed above is required.
Very importantly, as a German resident or a German expat, you should be well aware that German third party or personal liability insurance policies with a three or five-year term cannot be canceled before the term is complete. From the insurance agent’s perspective who sets up these contracts, they will receive a higher commission for locking a client into a multi-year policy.
Therefore, it is highly recommended that you only purchase annually renewable personal liability policies. In other words, there is no reason why you should lock yourself into an insurance product that doesn’t allow you to switch policies at a pre-established renewal date, especially if a more attractive insurance cover becomes available for you to purchase.
MW Expat Solution Services
Suppose you are a German expat or are living in Germany for some time in a job-related capacity. In that case, personal liability insurance is one of the most important and highly recommended types of insurance that you will want to take on.
However, depending on your specific needs, the number of family members you have, whether you are a property renter, whether you own an automobile, and many other factors, the type of personal liability insurance plan you should ideally opt for will vary.
Visit MW Expat Solution Services for more in-depth information about the different types of personal liability insurances Germany offers. We are committed to helping you navigate through the confusing and comprehensive maze of insurance products in Germany so that you can ensure your financial security in the long run, no matter what.