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What you need to know about the complicated world of German insurance

Germans love their insurances. From pet to death coverage, they've got it all. We take a look at all of the major insurance types and when you might need them.

What you need to know about the complicated world of German insurance
Photo: DPA

It’s no secret that in Germany, Versicherung, or insurance, is king. Whether it is to cover your home, car, work-life or person, you want to make sure that you are in-the-know about which services you should have. 

We are here to help with a full guide to the different types of insurances and when you might need them. 
Insurance for when you’re sick
With so many different kinds of health insurance, it’s good to know the differences. Photo: DPA
Krankenversicherung (health insurance) is the mack-daddy of all insurances, because without health insurance you are not even allowed to be in the country.
There are two basic types of health insurance in Germany – public and private. And trust us, there are some big differences between the two. 
Public, or statutory health insurance, is required for everyone earning less than €64,350 per year before tax, and what you pay as a contribution is adjusted for how much you earn. Certain people may opt out, like those making above this threshold or those who are self-employed.
If you’re a freelancer, a long-term student or a high-earner, you may be trying to decide between public or private. The main thing to keep in mind is this: statutory insurance contributions are based on income and the benefits you receive are according to need, whereas private insurance premiums are based on your risk factors and the benefits you receive are according to what’s in your contract.
Some 90 percent of the German population is covered by statutory sickness funds, according to the German Medical Association.
There are some insurances that you can add on top of your mandatory health insurance, such as Reisekrankenversicherung (Travel Health Insurance) and Pflegeversicherung (Care Insurance), depending on your particular needs. 
While not a necessity for everyone, if you find yourself frequently back-and-forth between many different countries outside of the EU, travel health insurance may be the best way to ensure that your healthcare benefits travel with you. In the same vein, care insurance, which provides funds for those who need intensive care through the form of hospice or other intensive service, may only be needed if you foresee a long-term care need for someone in your family. 
Insurance for when you may be liable
Let’s be real: sometimes we do stupid things. And if you hurt someone, you may be on the hook without this insurance. Photo: DPA
Most Germans consider Haftpflichtversicherung (third-person liability insurance) a must-have, as it protects you from personal liability in your everyday life. In a nutshell, this insurance covers participants for damages to a third party caused through careless actions on your part.
While this may sound a bit arbitrary, think of it this way: according to section 823 of the Civil Code in Germany, if a person causes injury to another – even accidentally – they are fully liable for any damage culpably caused.
This means if you accidentally drop a box off of your balcony and it lands on someone and permanently injures the person, you would be left on the hook to pay for damages. In this case, your Haftpflichtversicherung would cover these additional costs.
An important note for this insurance is that it does not cover people who are NOT third parties – as in your spouse, family, etc.  
Insurance for protecting your stuff
No use crying over spilled milk – but broken vases? Without this insurance, maybe. Photo: DPA
Hausratversicherung, or insurance of household contents, may be very useful if you value your stuff. This type of plan covers the costs if any of your home goods are stolen, damaged or otherwise harmed.
A home contents insurance can make particular sense if the value of your possessions rises. This is usually the case with growing families who are also expanding spatially and gradually adding higher quality purchases to their households. 
However, Hausratversicherung is meant to cover the things within your home – not the structure of your home itself. For example, if you live in a place with a lot of windows, glass damage is not usually covered by your household contents insurance. But never fear: Glasversicherung, or glass insurance, is an option to make sure that the possibility of a smashed window does not keep you up at night.
Particularly if you are a homeowner, Feuerversicherung, or fire insurance and Wohngebäudeversicherung (residential building insurance) are important for keeping your home intact. Residential building insurance is meant to reimburse residents for damages stemming from natural disasters, weather or water breaks, while fire insurance… well, it covers the costs of fire damages.
Insurance for getting around town
This is every driver’s worst nightmare, but it could be a whole lot worse without this type of insurance. Photo: DPA
This will likely come as a no-brainer, but car insurance, or Kfz-Versicherung, is important on German roads. In fact, a policy number is required to even register your car in Germany. So this is a must if you want to use your four wheels in Deutschland.
There are three basic categories of car insurance: Haftpflicht – third-party coverage, Teilkasko – partial coverage and Vollkasko – comprehensive coverage. 
Third-party coverage is the legal minimum coverage in Germany, and covers all damages you and your car cause to others on the road in an accident. However, this form does not cover damages made to your car if the accident was deemed your fault.
Partial coverage is a step up from the Haftpflicht, in that it includes all the basics, as well as protection in the case of theft, glass breakage and weather damages. However, this still will not include vandalism.
The comprehensive package combines the coverages of both of these and adds protection against damages made to your vehicle. This is also true when the accident is deemed your fault. 
Obviously the price of the coverage goes up significantly with the amount of coverage, so which plan is best for you? While there is no hard-and-fast rule, financial service company Allianz recommends the full coverage for owners of new cars, while saying many used car owners choose Teilkasko.
Are you one of Germany’s big city residents who don’t own a car? Your bike is up for coverage too! Fahrradversicherung, or bicycle insurance, comes at a lower price than the car version, and may be a good idea if you want to protect yourself if your fancy wheels get stolen.
Insurance for your day in court
In Germany, people go to court a lot. So much so that there is a type of insurance for it. Photo: DPA
Literally “law protection insurance”, Rechtsschutzversicherung will cover legal fees you incur in court or with a legal service. If you foresee a squabble with your landlord or have pesky neighbours, this may be the ticket to getting out of all of those annoying legal fees.
Depending on the policy, the Rechtsschutzversicherung may extend into your professional life too. Many professionals involved in risky work, such as doctors or nurses, choose insurance plans that can cover legal action taken as a result of their profession.
This form of insurance may not be necessary for everyone, but may be helpful when you feel you are getting ripped off by your landlord or want to negotiate a better contract. 
Insurance for the worst case scenario
Getting injured stinks. Without this insurance, bills when you are down-and-out can skyrocket. Photo: DPA
You know the old adage “accidents happen”? Well, they can also happen to you. For that reason, Germany has Unfallversicherung, or accident insurance. 
Accident insurance is intended to provide for your medical bills should you become disabled after a serious injury. While this is important for anyone in Germany, this insurance plan is extremely relevant for those who work in a job that involves manual labour or your ability to move around, as these injuries could impact work performance.
There are two main groups of accident insurance: the statutory accident insurance that covers accidents on the way to and from work and the private accident insurance, which is applicable for accidents in the private area, such as leisure, sports and household accidents. 
Depending on your job or leisure activity (we’re looking at you, bungee jumping enthusiasts) one or both forms of accident insurance may be a worthwhile investment during your time in ‘Schland.
Insurance for when the worst gets worse
Sometimes, injury means we are no longer able to work. In Germany, there is an insurance for that. Photo: DPA 
Berufsunfähigkeitsversicherung, or occupational disability insurance, shares a common thread with Unfallversicherung in that it protects you in the event of a severe accident, but serves a different function.
Unfallversicherung covers you if you incur medical expenses as a result of an accident: occupational disability insurance, on the other hand, takes effect if you are no longer in a position to pursue your profession. 
It makes no difference whether you have become incapacitated due to illness, bodily injury or an accident – an occupational disability insurance is valid for your entire working life and will pay the amount stipulated in the contract until the end of working years. 
According to a study by Nürnberger Versicherung and FAZ Institut, only 31 percent of millennials in Germany surveyed chose to have Berufsunfähigkeitsversicherung – a fact that the authors of the study say shows that young people here “seem to clearly underestimate the risk and its negative impact on living standards.” 
Whether or not occupational disability insurance is necessary for you will likely depend on your job and status within your family dynamic.
Insurance for your furry friend
Love them or not – pets can cause damage. In Germany, there is an insurance to make sure they don’t get you into too much hot water. Photo: DPA
Have you brought your pet along to Germany? Then it might be a good idea to insure your furry companion with Haustierversicherung, or pet insurance, before taking to the city streets.
One area of pet insurance is liability insurance, much like the human version Haftpflichtversicherung mentioned earlier. In Germany, if your pet causes any damages to another person or property, you as the owner are liable for the damage. With Haustierversicherung, these costs are covered by your insurance plan.
In addition to the liability risk, pet insurance can also be taken out to cover veterinary costs. This type of pet insurance is then called Tierkrankenversicherung, or animal health insurance, and ranges in coverage from medications to exams and even surgeries. This is usually separate from the pet liability insurance, though sometimes can be bought as a bundle package.
Animal health insurance is currently available in Germany for dogs, cats and horses. 
Insurance for your final resting place
We all have to die at some point. In Germany, there are a few options for making sure your loved ones are taken care of after you are gone. Photo: DPA
You never know what is around the corner, so life insurance is a must no matter where you live, and Germany is no different. 
In Germany, there are multiple forms of Risko-Lebensversicherung, or term-life insurance, that can take care of your loved ones between 10, 15 and 20 years after your death. 
Premiums vary depending on the amount of the plan, as well as the risk factors held by the individual seeking insurance. While this is not necessary for everyone, term-life insurance is particularly encouraged for people that are the main breadwinners in their families or have small children.
In Germany, however, there is another option for protecting those close to you after your final goodbye: Sterbegeldversicherung, or death expenses insurance. Intended primarily for those already at an advanced age, this kind of insurance only covers the costs of a funeral and the associated bills. 
While this may not sound like much, funeral guide company Funeral Arrangement Guide estimates that the average funeral in Germany costs as much as €8,000 and can soar even higher than that. With these kind of prices, it can be advantageous to have a cost plan to help cover.
The maximum amount available with the Sterbegeldversicherung is usually around €20,000.

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For members


Why are medicines in Germany only available in pharmacies?

Over the counter medicines like paracetamol are not usually available to buy in German drugstores or supermarkets. We spoke to an expert to find out why there are strict rules on the sale of some medical products - and why they seem pricier than other countries.

Why are medicines in Germany only available in pharmacies?

If you’ve ever found yourself scanning the aisles of drugstores like DM or Rossmann wondering where to find the ibuprofen, paracetamol or cough mixture, you will be disappointed – they can generally only be bought in pharmacies in Germany. 

It can be a big culture shock to foreigners who are used to picking up some medicines while doing their weekly shop at the supermarket or while buying shampoo at the drugstore. 

So why are these over-the-counter medicines only sold in the Apotheke?

We got in touch with the Federal Association of German Pharmacist Associations (ABDA) to find out more.

Christian Splett, a spokesman for the association explained that – with very few exceptions – only pharmacies can sell over-the-counter (OTC) or non-prescription drugs in Germany. He said this is enshrined in German law, and is based on a couple of important principles.

Firstly, there is an emphasis on consumer protection.

“In Germany, we have a high standard of consumer protection which emphasises prevention rather than compensation,” said Splett. “We wouldn’t want someone to go and buy a pack of pain killers from a petrol station and then get seriously unwell.

“Healthcare is not like any other business. We have a serious responsibility for people’s health.”

Linked to this is the principle that taking medication is not something to be taken lightly.

A man taking a paracetamol tablet. Photo: picture alliance/dpa | Lino Mirgeler

“In Germany, it’s seen as really important that the use of medicinal drugs isn’t trivialised,” Splett said. “This is strengthened both by cultural attitudes and by the law.”

Since 2004, it has also been possible to buy medications from online pharmacies, from medicine providers such as DocMorris and Shop-Apotheke, which are sometimes cheaper than the high street pharmacies. 

These mail-order pharmacies are fully-fledged on-site pharmacies with a mail-order permit under the German Pharmacy Act.

Who decides on the prices of medicines?

On the question of why prices of medications such as cough medicine and standard pain killers seem to be higher in German pharmacies than in other European countries, the answer may lie in the fact that German pharmacies have complete freedom to set their own prices. 

READ ALSO: EXPLAINED: How Germany will roll out e-prescriptions this year

“Despite strict regulations and moral obligations, pharmacists still have to act like other business owners, for instance, they set their prices for over-the-counter drugs with regard to the competition,” Splett explained.

According to the website of the Federal Association of German Pharmacist Associations e.V., the prices for individual drugs or for an entire product range can involve calculations based on various business and competitive factors.

For example, the purchasing conditions of a product may vary depending on the manufacturer, wholesaler, order quantity or season. Pharmacies also have to factor in the costs that they incur themselves, such as for personnel or other material costs.

The competitive situation, which is determined by the range and prices of neighbouring pharmacies, can also influence a pharmacy’s price calculation.

Meanwhile, there’s also the 19 percent value added tax (VAT), which also makes the price higher.