Legal Insurance in Germany: The Definitive Guide

Did you know that 40% of German households have legal insurance? That’s nearly half the country ready for legal challenges. As an expat, you might be wondering why so many Germans are equipping themselves with this protection—and whether you should do the same.

If you’re an expat in Germany, you might find yourself facing unfamiliar laws and regulations. From rental agreements to employment contracts, the German legal landscape can be confusing and complex.

That’s where legal insurance, or “Rechtsschutzversicherung” as it’s known in German, comes in handy. Don’t let that tongue-twister scare you off—you don’t need to pronounce it to understand its benefits.

This guide will walk you through everything you need to know about legal insurance in Germany. We’ll cover:

• What it is
• Who needs it
• The different types available
• And how to choose the right policy for you. 

Let’s kick things off 🤝

What is legal Insurance in Germany?

Legal insurance in Germany is a type of coverage that provides financial protection when you need to take legal action or defend yourself in court. This insurance is designed to cover various legal costs, ensuring that money never prevents you from asserting your rights. For example…

• Court fees
• Lawyer’s fees
• Witness expenses
• Costs of the opposing party if you lose the case (which you would be liable for under German law)

Life as an expat can throw you some curveballs ⚾️

Maybe your landlord is trying to charge you for pre-existing damage to your apartment. Or perhaps your new job contract has some clauses that look a bit fishy, but you’re not sure what’s standard practice in Germany.

How will you handle a legal dispute in German or make sense of complex local laws on your own?

Legal insurance can help in these situations. It gives you access to expert advice without worrying about high legal costs.

Who needs legal insurance in Germany?

Legal insurance can help anyone. But if you’re an expat in Germany, it’s practically a must-have. Why? Because navigating a foreign legal system can be tricky.

Christopher, one of Feather’s Insurance team lead, adds: “We often help customers with disputes against their employers, and legal insurance steps up fast—covering everything from mediation costs to full legal support without delay.”

So, who’s more likely to need this safety net?

• Renters: Leasing an apartment puts you in prime territory for legal snags, especially with Germany’s complex tenancy laws. Legal insurance can help you navigate these challenges with ease.
• Workers: German employment laws can be tricky, and disputes aren’t uncommon. If things go south at work, legal insurance has your back.
• Drivers: From traffic fines to car ownership issues, the road can come with its own set of legal hurdles. Legal insurance prepares you for whatever comes your way.
• Students: Even student life isn’t immune to legal challenges, like disputes over academic misconduct. Legal insurance ensures you have support if such situations arise.

Now, let’s talk about you 🤔

If your German is still a work in progress, if you’re planning to stick around in Germany for the long haul, or if German law seems as clear as mud—guess what? 

Legal insurance might just be your new best friend. It’s not just about protection; it’s about peace of mind in your new home.

Common misconceptions

Let’s clear up some misunderstandings about legal insurance in Germany:

1. “It covers all legal costs”: Not quite. While comprehensive, it’s not a magic wand. Pre-existing issues, intentional crimes, and some areas like tax law? They’re usually off the table.
2. “It’s only for going to court”: Many people think legal insurance is only useful if you end up in court. In reality, it often covers legal advice and can help resolve issues before they reach the courtroom.
3. “It’s too expensive”: While there is a cost, it’s important to weigh this against potential legal fees. A single legal dispute could cost more than a lifetime of insurance premiums.
4. “I don’t need it because I always follow the law”: Life’s not always fair. Even when you’re in the right, you might need to defend yourself or fight for your rights in a contract dispute.
5. “Public legal aid is enough”: Well, sort of. While Germany offers public legal aid, it’s usually limited, and income-dependent. Legal insurance provides more comprehensive coverage and freedom of choice in legal representation.

Types of legal insurance in Germany

There are several types of legal insurance in Germany, each covering different aspects of your life:

1. Private legal insurance: This covers personal legal matters outside of work and traffic. 

For e.g. You’re having a dispute with a neighbor over noise levels. Private legal insurance would cover the costs of mediation or legal action if necessary.

2. Professional legal insurance: This covers work-related legal issues.

For e.g. Your employer is trying to terminate your contract unfairly. Professional legal insurance would cover the costs of fighting this in labor court.

3. Traffic legal insurance: This covers legal issues related to driving and vehicle ownership. It’s not just about accidents. It also covers:

• Parking violations
• Disputes with administrative authorities (e.g., regarding your driver’s license)
• Disputes with financial authorities (e.g., vehicle tax issues)
• Legal protection in contract and property law (e.g., disputes after buying a car)

For e.g. You’re involved in a car accident and need to prove you weren’t at fault. Or, you receive an unfair parking ticket or face issues with vehicle registration. Traffic legal insurance would cover the legal costs of defending your case or contesting these matters.

4. Rental legal insurance: This specifically covers disputes with landlords.

For e.g. Let’s say your landlord refuses to return your security deposit citing damages to their property. Rental legal insurance would cover the costs of legal action to recover your deposit.

Many insurance providers offer comprehensive policies that combine multiple types of coverage. These can be particularly useful for expats who want broad protection.

What does legal insurance cover?

Legal insurance typically covers a wide range of situations, including:

1. Tenancy disputes: Issues with rent increases, evictions, or deposit returns.
2. Employment conflicts: Wrongful termination, wage disputes, or workplace discrimination.
3. Consumer rights: Disputes with businesses over faulty products or services.
4. Traffic violations: Contesting unfair fines or tickets (but not paying the fines themselves).
5. Criminal defense: If you’re wrongly accused of a non-intentional crime.
6. Government office disputes: Problems with the Finanzamt (Tax Authority) or Bürgeramt (Citizens Service Centres). Be aware that immigration issues are rarely covered.
7. Insurance disputes: If another insurance provider refuses to pay a valid claim.
8. Personal injury claims: If you’re injured due to someone else’s negligence and want to sue for damages.
9. Your family: Spouses can join for a bit extra, and children under 18 are usually automatically covered.

What situations are typically not covered under legal insurance?

Now, let’s talk about what legal insurance won’t cover:

1. Pre-existing legal issues: Problems that started before you purchased the insurance are not covered.
2. Intentional crimes: This includes piracy, fraud, tax evasion, and other deliberate illegal activities.
3. Liability claims against you: If someone sues you for damages, this is covered by liability insurance, not legal insurance.
4. Immigration matters: Most policies exclude immigration-related legal issues.
5. Family law: Divorces and inheritance disputes are often excluded, though some policies may cover an initial consultation.
6. Fines and penalties: While the insurance may cover contesting a fine, it won’t pay the fine itself.
7. Business activities: Private legal insurance doesn’t cover issues related to self-employment or business operations.
8. Cases with no chance of success: Your insurer won’t fund legal action if they believe you have no chance of winning.

Remember, some insurers offer add-ons for extra coverage. Always read the fine print!  

How much does legal insurance cost in Germany?

Wondering about the price tag? Let’s break it down:

On average, you’re looking at €10 to €40 per month for solid coverage. (Psst… at Feather, it’s starts at €13.51!)

What affects the cost? It’s a mix of what you’re covering, how much coverage you want, where you live, and even what you do for a living.

Sounds pricey? Hold that thought! Remember those lawyer fees we mentioned?

Even for the simplest “I could probably handle this myself” kind of case, you’re looking at forking out at least €500. And those tricky, complex cases? They can soar into the tens of thousands.

Suddenly, that monthly premium doesn’t seem so bad, right? 😉

In Germany, lawyer fees aren’t just pulled out of thin air. There’s actually a law for that—the “Law on the Remuneration of Attorneys” (Rechtsanwaltsvergütungsgesetz) or RVG for short. 

Want to see some numbers? There’s a nifty calculator on the RVG website where you can punch in your dispute amount and watch the potential fees add up.. 

Now, let’s talk about choosing the right legal insurance for you

Choosing the right legal insurance for expats

So, how do you pick the perfect policy? Here’s your cheat sheet:

1. Coverage areas: Ensure the policy covers the areas most relevant to your situation (e.g., employment, tenancy, etc.).
2. Language support: Look for providers that offer services in English or your preferred language.
3. Waiting periods: Be aware of any waiting periods before you can make a claim.
4. Excess/deductible: Check if there’s an excess you need to pay when making a claim.
5. International coverage: If you travel frequently, consider a policy that offers some coverage outside of Germany.

Need a hand deciding? Feather offers a recommendation tool just for expats like you! 

How to use your legal insurance

Got legal insurance? Great! If you find yourself in a situation where you need to use your legal insurance, follow these steps:

1. Contact your insurance provider: Do this before taking any legal action. They’ll guide you on the next steps and confirm if your situation is covered.
2. Choose a lawyer: Your insurance might have a network of lawyers, or you may be able to choose your own. Ensure they’re experienced in your specific legal issue.
3. Keep records: Document everything related to your case, including all communication with your insurance provider.

Pro tip: Most policies have a 3-month waiting period. So, get insured before you need it!

What if your claim gets rejected? Don’t panic:

1. Ask why (in detail)
2. Provide any additional information that might support your case
3. If necessary, you can file a complaint with the German Insurance Ombudsman

Alternatives to legal insurance 

While legal insurance offers comprehensive protection, there are alternatives worth considering:

1. Consumer protection organizations (Verbraucherzentrale): They can give you solid advice on your rights, help you understand complex legal matters, and guide you in resolving disputes out of court. Due to german laws, what they can’t do is represent you in court..
2. Tenant associations (Mieterverein): For housing-related issues, joining a tenant association can provide legal advice and support for a yearly fee.
3. Trade union membership: If you’re employed, trade unions often offer legal support for work-related issues.
4. Advisory service (Beratungshilfe): Low-income individuals may qualify for state-funded legal advice.
5. Legal aid (Prozesskostenhilfe) and free resources: Legal aid ensures access to justice for those who cannot afford court and lawyer costs. Additionally, some organizations offer free initial consultations or advice through legal hotlines and other resources.

These alternatives can be lifesavers for specific issues or if you’re watching your wallet. But remember, they’re not as all-encompassing as legal insurance.

Why Feather is right for you

As an expat, navigating German legal waters can make you feel like you’re swimming upstream. 

That’s where Feather comes in. We get you because we’re made for you.

What’s in it for you?

• English support (because legal German is hard enough for Germans!)
• Coverage tailored to expat life
• Crystal-clear pricing and terms
• Expert guidance every step of the way

Now, we’d love to hear from you! What’s your biggest concern about legal matters as an expat in Germany? Is it rental disputes, work contracts, or something else entirely?

Don’t wait for legal trouble to knock on your door. Take the first step towards peace of mind—get covered with Feather today!