Liability Insurance in Germany: The Definitive Guide (2024)

What you’re about to read is the most comprehensive guide to liability insurance in Germany.

In this new guide, you’ll learn…

• What liability insurance is, and how it works
• If you should get private liability insurance
• How to choose your personal liability insurance company

(We’ll also include many actionable tips and lessons we’ve learned by helping over 10,000 customers with their third-party liability insurance.)

Let’s get it started:

What is liability (Haftpflichtversicherung) insurance?

Liability insurance protects policyholders financially from damages, injuries, and financial loss caused to another third party, along with any associated legal expenses. If you don’t have liability insurance, you’ll have to pay for these costs yourself.

Liability insurance aims to shield you from mistakes or moments of inattention that, let’s face it, everyone experiences occasionally. 

For example, if you spill coffee on a friend’s laptop and break it, you would be responsible for the damages. In some cases, like causing a road accident while riding your bike, you might have to pay millions in damages. 

Liability insurance provides relief by having your insurance check if you are responsible for the damage and pay on your behalf. If you are not accountable, the company will defend you from baseless claims (passive legal protection).

What are the different types of liability insurance?

Since one can cause damages in many ways, many types of liability insurance exist. They all protect you financially in case of injury, damages, or financial losses to another party. 

Here are the most important types of liability insurance to know when living in Germany:

For the rest of this post, we’ll focus on private liability insurance, as it’s the most popular.

How does personal liability insurance work in Germany?

In Germany, personal liability insurance is highly recommended, as people are fully and legally liable for accidental injury or damage caused to others or their property. Specifically, these are:

• Personal injuries: Accidents causing injury or death, such as while cycling or during sports activities.
• Damage to property: Accidental damage to others’ property, like breaking a landlord’s sink or damaging a friend’s belongings when moving house.
• Financial losses: Causing someone to lose income or incur extra expenses, such as accidentally locking a friend’s bike along with yours, forcing them to take a train to their destination.

Without insurance, people would need to cover all repairs, replacements, medical bills, and loss of earnings out of pocket.

However, with private liability insurance, you can make a claim and your insurance company will:

1. Verify the claim: The insurance company will check if you are responsible for the damage.
2. Cover the costs: The company will pay for the damages if the claim is valid.
3. Defend against unjustified claims: If necessary, the insurance will defend you against unfounded claims, including court defense.

We’ll discuss the exact process of filing claims towards the end of this post. 

The scope of coverage and premium vary depending on the policy and its provider. In Germany, personal liability insurance can start as low as €2 per month, but great coverage starts at €4 monthly. At the end of the day, you get what you pay for.

Should you get liability insurance?

Liability insurance, though not mandatory, is highly advisable for everyone. Accidents can happen anytime, and even small ones can have huge financial repercussions. 

It’s not rare to hear stories of people liquidating their assets to cover the costs and, at worst, even declaring bankruptcy. Liability insurance ensures that you never reach that point and are protected if someone sues you for damages.

Getting comprehensive liability insurance should be a priority for those moving to Germany. Given the potential financial risks, it is a wise and, we’d argue, necessary decision.

What is covered by private liability insurance?

Private liability insurance typically covers a range of situations where you might be held legally responsible for causing injury or damage to someone else’s property. 

Most policies will cover between 10 and 80 million euros. Feather’s policy covers up to 50 million euros. 

Here is a non-exhaustive list of the most common claims we cover at Feather:

1. Accidental property damage: If you unintentionally damage someone else’s property, such as breaking a neighbor’s window or spilling a drink on your friend’s expensive rug, your liability insurance covers repair or replacement costs.
2. Bodily injury: If you accidentally injure someone, like causing a pedestrian to trip or knocking someone over while cycling, your policy covers medical or rehabilitation costs.
3. Legal defense: If someone sues you for an incident covered by the policy, your insurance can cover legal defense fees, including lawyers and court costs.
4. Financial losses: If your neighbor has to stay in a hotel due to your negligence, such as accidentally leaving a tap running and causing water damage to their apartment, your insurance will reimburse them.
5. Damage to rental property: If you’re living in a rented apartment, accidental damages you cause to the fixed building and furnishings, like scratching the walls when moving furniture or burning a kitchen surface, your insurance can cover these damages. ​​
6. Pets*: If your pet harms someone or damages their property, such as biting a passerby or damaging a visitor’s belongings, your insurance will cover those costs.
7. Damage caused by your child**: Your child accidentally breaks an expensive item at someone else’s home, like a friend’s plasma TV. Your insurance can cover the costs of repair or replacement.​
8. Bad debt cover***: If someone else has damaged your property or accidentally caused you harm but isn’t insured and can’t pay, your insurance may cover some of the debt they owe you.
9. Lost third-party keys****: if you lose or misplace them, the insurance will cover the cost. This is also covered if the third party (for example, your landlord) needs to change the locks for security reasons.

It’s essential to thoroughly review the policy details to understand specific coverage limits, exclusions, and additional features or riders available to tailor the insurance to your needs. If you’re wondering if your policy covers a specific incident, you should always submit your claim, and your company will investigate its veracity for you.

* Excluded are dogs and horses, as they need their own liability policies.

** As long as you have the family tariff, accidental damages caused by your kids are covered.

*** To grant compensation, a judge must declare the individual insolvent.

**** The cost of a locksmith breaking into the apartment if you lose or misplace your keys is, unfortunately, not covered by liability insurance.

What is not covered by private liability insurance?

Liability insurance usually does not cover the following:

1. Driving accidents: Your car insurance covers these. You’ll either get it automatically from renting a vehicle or be legally required to drive your vehicle (e-scooters included).
2. Damage to your property: It only covers third-party property. If you want these covered, consider household contents insurance.
3. Wear and tear: Normal deterioration is not covered as your landlord should not charge you for it.
4. Glass damage in rentals: This includes windows, glass doors, and glass/ceramic stoves.
5. Damage caused by mold. Some policies may cover this, but it comes at a significant price increase.
6. Damage caused by dogs, horses, or wild animals: you’ll need separate pet liability insurance to cover these damages.
7. Intentional or criminal damage.
8. Fines and penalties: this includes piracy and copyright infringement.
9. Damage to heating, mechanical, boiler, and water heating systems.
10. Locksmith: costs associated with a locksmith getting into an apartment.

How much does liability insurance cost in Germany?

The liability insurance cost in Germany is generally less than €5 per year. However, these factors influence the cost of your premiums:

1. Coverage level: Basic protection is cheaper than premium protection.
2. Deductible amount: Higher deductibles usually result in lower premiums.
3. Payment method: Annual payments might be cheaper than quarterly payments.
4. Contract term: Longer contract terms can sometimes offer better rates.
5. Personal factors: Being single, married, or having children can affect the premium.
6. Additional coverage: Insuring specific items like keys or covering children’s actions can impact the cost.

Even with all these factors considered, it is uncommon for your monthly premiums to exceed €10.

Plus, at Feather, you can update your policy to add another person or family member anytime.

Who does your liability insurance cover in Germany?

In Germany, liability insurance covers multiple individuals, depending on your policy type. Here’s a detailed overview of who is usually covered:

The policyholder

The first and most straightforward coverage applies to you, the direct insurance holder. As the individual who takes out the insurance policy, we always cover you under the policy’s terms.

Family members and household

Spouse or domestic partner: If you are married or living as an unmarried couple in the same household, your partner can be covered by your liability insurance if you opt for the appropriate plan.

Children (If you opt for the relevant plan):

• Minors: unmarried children under 18 who live in the household are covered. This includes biological children, stepchildren, adopted children, foster children, half-siblings, nephews, nieces, and grandchildren.
• Adult Children: Coverage extends to unmarried children over 18 who are still in their first education (school or university) and not working full-time. Typically, this coverage continues up to age 21, including periods of voluntary service or vocational training.

Parents: If your parents live with you in the household, you can also cover them through your private liability insurance.

Extended Family and Others in the Household

Siblings and grandparents: Your policy can cover siblings and grandparents if they share the same residence with you. 

Au pairs and exchange students: The coverage includes individuals temporarily integrated into the family unit, such as au pairs and exchange students.

Persons in need of care: Your policy covers individuals who require care and live in the household.

Household employees: Your liability insurance also covers persons employed, such as domestic workers, for incidents related to their work.

Special Considerations for Children

Under 7 years old: Children under 7 are not legally responsible for damages they cause.

Ages 7 to 10: Children may be held liable under certain circumstances.

Ages 10 to 18: Children can be held liable for their actions, but the parents are usually responsible for damages.

You must have a family tariff to ensure children are covered under your policy. This plan is more economical and extends coverage to all eligible household members.

What to look out for when choosing liability insurance in Germany.

When choosing liability insurance in Germany, look for companies that offer high coverage amounts, a best performance guarantee, and comprehensive bad debt and gradual damage coverage. For families, ensure the policy covers all members and consider a deductible to manage premiums effectively.

Here’s a detailed guide to help you make an informed decision.

1. Determine the coverage amount you need to protect yourself

The first step to choosing a liability insurance company is comparing coverage amounts. You should opt for the highest coverage amount you can afford, as it provides more protection for a tiny increase in cost (a few euros at most). 

Our advice is to aim for coverage of around 50 million euros. Also, check that the policy provides at least 10 million euros per injured person.

2. Get a best performance guarantee

The best personal liability policies include the best performance guarantee. 

A “best performance guarantee” ensures that your policy matches or even exceeds the coverage benefits of other companies. This guarantee gives you the best benefits from different insurers under one policy.

Not all policies include this guarantee, so it’s worth asking your insurance company. Feather offers this benefit.

3. Protect yourself from bad debt

The next step is to ensure your policy includes coverage for bad debt and to understand the extent and limits of that coverage.

“Coverage for bad debt” is a clause that covers damages to you or your property caused by someone else’s inability to pay. 

This is useful when the person responsible for the damage lacks liability insurance or sufficient assets to cover the damages. In such situations, a bad debt coverage clause acts like reverse liability insurance, where your policy covers damages caused by someone else who cannot pay.

4. Aim for a low claim threshold

Ensure the policy covers claims without high minimum limits. Some insurers cover damages starting from 2,500 euros, whereas Feather’s has none. 

Still, it’s usually a good idea to save your personal liability insurance for big accidents instead of minor mishaps. If you file too many small claims, your premiums might go up.

5. Ensure the policy covers everyone in your household.

Look for policies that cover married couples, civil partners, and children. If unmarried, ensure you can explicitly name a co-insured person in the policy.

This approach simplifies your policy management and reduces your premiums compared to paying for separate policies.

6. Decide if you want a deductible

You should consider whether you need a deductible. A deductible is the out-of-pocket amount before your insurance coverage kicks in. This typically results in lower premiums but means you’ll cover small claims yourself.

A reasonable deductible amount is around 150 euros per year. To decide if a deductible is reasonable, compare the savings on premiums with and without a deductible. 

While lower premiums can make liability insurance more affordable, it is already one of Germany’s most inexpensive policies, so it may be better to avoid a deductible altogether.

The best liability insurance companies in Germany

Feather – Best overall

Feather stands out as Germany’s best option for liability insurance. 

We offer comprehensive coverage starting at €4.94, with protection up to 50 million euros. The cost-to-coverage ratio is highly competitive. 

We provide excellent customer support in English, accessible via calls, chat, or email, ensuring smooth communication. 

Our claims process is straightforward—submit documents online, and Feather handles the rest. 

Feather allows flexibility in adding or removing co-insured persons at any time. 

With a rating of 4.9/5, it’s ideal for English speakers looking for solid coverage and exceptional service.

AXA – Cheapest option

AXA offers Germany’s most budget-friendly liability insurance, with premiums starting at just €1.49 for coverage up to 10 million euros. 

However, this low cost comes with trade-offs:

Customers often report slow response times from customer service and tedious, time-consuming claims. 

With a customer satisfaction rating of 1.4/5, AXA is best for those who prioritize cost savings over service quality and are prepared to handle slower customer service and a more complex claims procedure.

Gothaer – Best for German speakers

Gothaer provides affordable liability insurance starting at €2.81 for coverage up to 10 million euros, with a €150 deductible. 

While their premiums are reasonable, their service is more suited to German speakers, as non-German speakers may struggle to communicate with support. 

Gothaer has a moderate customer satisfaction rating of 2.9/5. This company is ideal for German speakers who prefer to handle their insurance matters in German and seek moderately priced coverage.

How to make a claim for liability insurance

The exact process depends on your insurance. At Feather, you can complete the entire process via our app or website. 

However, the general steps are similar across different companies. 

Here’s how it typically works:

1. Do not pay the other person immediately

Your insurance company must assess the situation to avoid unjust claims and excessive payouts. Allow the insurer to evaluate the claim before you make any payments.

2. Determine if you’re covered

If you’re unsure whether the accidental damage falls under your coverage, submitting a claim is the easiest way to get clarification. Your insurance company will do the work for you.

3. Inform your insurer on time

Notify your insurer about the incident within the specified time limit. Some companies are stricter and only give you 7 days, while others are flexible. At Feather, we can accept claims for accidents up to three years ago. Still, you should submit your claim as quickly as possible, as you’ll have an easier time collecting the necessary documentation.

4. Gather and submit essential information

Include as much information as possible in your submission to ensure your claim is processed quickly. Incomplete information can lead to delays and additional questions. 

At the very least, make sure to provide:

• Incident details: What exactly happened and the date it occurred.
• Documentation: Invoices, repair estimates, photos of the damage or injury.
• Third party information: Name and contact information of the affected third party.
• Personal information: Your name, address, and email.
• Additional expenses: Include these details if the third party has already paid for repairs or medical treatments.

5. Submit Your Claim

Use the method specified by your insurer, whether through an app, website, or paperwork. To avoid delays, make sure to include all required documents and information.

6. Claim Processing

Your insurer will investigate the claim. This may involve gathering more information, assessing the damages, and determining liability. The insurer may also handle your legal defense if necessary.

7. Settlement

Once the claim is approved, your insurer will pay the injured party directly. The settlement process includes negotiating the claim amount and finalizing the agreement.

8. Follow-Up Actions

Keep track of your claim status and contact your insurer for any updates. You can appeal or dispute the outcome if you disagree with the claim decision.

Conclusion

So, this concludes our definitive guide to liability insurance in Germany. 

Now, we’d love to hear from you:

Do you have any questions about private liability insurance or the specifics of Feather’s plan?

Let us know by commenting below or booking a call with our experts.

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