“Many people have their computers better insured than their own lives,” a spokesman for the consumer group representing insurance customers (BDV) told The Local.
The group said most households could save hundreds of euros a year by looking at their insurance plans and cancelling the pointless ones, Die Welt reported on Tuesday. They should take the opportunity to make sure the important things are better covered.
“Germans are becoming increasingly badly insured, few people give it proper thought,” the spokesman said.
Insurance salesmen are paid commission for each policy they sell, the BVD said, and warned that they often push to sell policies which will benefit them, rather than focussing on the needs of the customer.
One of things people are overspending on is Sterbegeld or funeral cover, a policy which is advertised as leaving a grieving family with a sum of money to cover burial costs.
“Because people are living longer, they are paying more and more money into funeral cover,” a BVD spokeswoman said.
“It is this kind of insurance that plays on people's fear of death and fear of leaving behind loved ones with nothing to cover costs.”
Yet many of the benefits of funeral cover can be obtained through run-of-the-mill life insurance for much less money.
Other policies which should be considered carefully include wedding cancellation insurance, mobile phone or luggage loss coverage, policies for overnight hospital stays, broken glasses and smashed glass insurance.
“Losing a phone is annoying but it is not worth spending money each year to insure it,” the BVD spokesman said. “It only makes sense to insure items worth more than €500."
“As for wedding cancellation insurance – it hardly ever happens, I have never seen it happen.”
Drivers who insure passengers in their vehicle are also wasting money, the BVD said, as they are covered in the case of an accident, by their own insurance.
BDV chairman Thorsten Rudnik told Die Welt, “lots of people don't realise that they're paying too much money for insurance they either don't need at all or can get for considerably less.”
But the BDV did recommend, however, that certain insurance not be skimped on, such as personal liability insurance as it covers accidents that an individual often could not cover out of their own pocket.
In 2010, 69.5 percent of Germans bought this kind of coverage according to the German Insurance Association (GDV) – but that leaves nearly a third of the population not covered, the spokesman added.
Personal finance expert Kai Waldmann of the German personal advisory group MLP told the Welt, “the more you stand to lose, the more important it is to be insured.”
“Not being able to replace something from your own means is reason to think about taking out an insurance policy.”