'It can really save you': Why liability insurance is essential in Germany

Unlike health insurance, which is compulsory, liability insurance (German: Haftpflichtversicherung) is not. However, it is considered so necessary in Germany that almost nine out of every ten people have it.

But what is it, why is it so popular and what should I do about it? In partnership with Coya Insurance, we’ve done a deep dive to tell you what it is - and break down why you need it. 

Vorbereiten vorbereiten vorbereiten (preparation preparation preparation)

Of the German stereotypes that ring true – and there are many – there’s perhaps none more accurate than the love of planning and preparation.

Arriving late and subsequently blaming a tardy bus connection is likely to be met with scepticism - not least because the bus is unlikely to be late - but because this is a contingency that a properly prepared person would have planned for.

Which brings us to the very real and very German phenomenon of liability insurance. This insurance covers you for the cost of any damage you cause – whether intentionally or not.

This applies to damage to people or to property, as well as economic damage – i.e. if your actions hamper someone’s ability to work.

Photo: CH / Pexels

In Germany the phrase ‘you break it you bought it’ is taken quite literally - in fact, it's the law. Damage by yourself or anyone you're responsible for - kids, pets - must be compensated by you. 

Landlords will often not take you without it, while we've also heard it can be an impediment to dating. 

'For the coverage you get, it's shockingly affordable'

Sarah Whitcomb, originally from the US, found out about the need for liability insurance the hard way just a few months after arriving in Berlin. 

“I was biking in Berlin and not being experienced in dealing with tram lines, I lost control of my bike and hit a parked car.”

"It was a Mercedes. Typical. When I got up, I saw that I had broken the taillight.”

Sarah left a note with her full name and mobile number before receiving a call just hours later about the incident.

“She (the caller) was very alarmed when she heard I didn’t have liability insurance. (Before the call) I’d never heard of it.”

Fast forward a few weeks and Sarah had received a bill for more than €6,000 – including repairing damage to the car that she had not caused but couldn’t prove wasn’t her - as well as a fine from the police for fleeing the scene of an accident.

“I paid them. It was all of my savings at that point.

“I didn’t ride my bike again until I had it… It’s really affordable – it’s shockingly affordable, when you think about how much coverage you get.”

“It can really save you. I went from having a nice little nest egg for the first time in my life to being tapped out. And that just doesn’t need to happen."

Photo: Tobias Reiner / Unsplash

In February 2020, The Local reached out to our most valuable resource – our readers – on social media to get their opinions on liability insurance. The callout had a huge response, showing just how important it is.

One user Bene said he “was forced to get it to be able to join a sharehouse” while Tinkmaus said the real question was not why should you have it “but why would you be crazy enough not to”.

Florian M said it was about peace of mind: “To me it is mainly what could happen if I don’t have it. Things could get very expensive. Also if you accidentally break something expensive when you are at a friend’s house, you don’t have to worry about paying for it”.

Mike K said it was essential as one should not assume that damage would be covered under other policies, i.e. those taken out by your landlord and employer.

Finding the right liability insurance

OK so if it’s good enough for 85 percent of the population, it’s good enough for me, right? That’s true – but remember that not all insurances are assured to ensure coverage.

(If you think that sentence is confusing, then just wait until you delve into German insurance law. Hey, even the word Haftpflichtversicherung is difficult to get your tongue around!)

Photo: Andrea Picquadio / Pexelss

The legal framework surrounding insurance is made up of a complex spiderweb of rules and regulations that is difficult to navigate even if German is your first language – and nigh on impossible if it’s not.

Considering the consequences – you could be liable for an amount in the millions – it’s important to get a policy which covers a high amount.

The German Association of the Insured (BDV) is an independent organisation representing “the rights of insured people in Germany” which does not have ties to any insurance agent.

While their guides are primarily in German, they do give advice for what to look for in a liability insurance policy.

As the BDV say on their website (in German): “The most important liability insurance is personal liability insurance. This should therefore be taken out by everyone without exception, as it covers the payment of damages if others have been culpably injured. It also defends unjustified claims in court if necessary.”

So then where should we go from here?

Besides having a policy which covers you – which is kind of essential – another major priority has to be how to handle a claims process – or even how to ask questions.

Coya’s website and app is available in English and German, allowing you to claim in your preferred language in just seconds.

Their policies are particularly popular with expats and internationals in Germany thanks to ease of use and the security offered by their policies.

With policies that start at less than €5 per month, which have zero deductible, can be cancelled anytime and are completely paperless, it’s the logisch thing to do!

Why take a chance being uninsured when companies like Coya make it so simple to have peace of mind? Get a quote for one of Coya’s affordable insurance policies, in English, in just a few clicks.

This article was produced by The Local and sponsored by Coya.