Important Insurance Information

Before you move to Germany you should find out about the kinds of insurance that you will need while you are here. While some are optional such as liability insurance, others such as vehicle and health insurance are not.

Mandatory Insurance

1. Health Insurance (Krankenversicherung)

All residents of Germany must have health insurance. There are two types of insurance to choose from. The first is a state insurance plan for most residents and foreigners moving to Germany. The second is a private plan for people earning more than 49,550 Euros a year. Within both systems, there are many companies and options to choose from. For more information please see our information on “Health Insurance”.

2. Car Insurance (Autoversicherung)

You are required to have third party liability insurance if you own and drive a car in Germany. The price of your insurance policy depends on your age, type of car and driving record. Financing companies and banks may require you to take out a more extensive insurance if your car is being financed. For more information please see our section on “Driving in Germany”.

Optional Insurance

1. Household Contents Insurance (Hausratversicherung)

This type of policy covers your belongings and reimburses you when your goods are damaged by fire, vandalism, storm, water (such as broken pipes) or if they are stolen in an act of burglary. If you are a tenant, you should be aware that your household contents insurance will not cover damage to rented furniture. For items kept outside of the premises, such as bicycles and garden furniture, the coverage is only about 10-15 % of the insured sum.

The insurance company will require an inventory of your possessions and their value to determine the cost of your policy. The sum is calculated using the replacement value of your belongings. If you own very expensive jewellery or you are an art collector you may need a more specialized insurance to cover these valuable items.

Please note that some insurance companies like to sell coverage plans with a three to five year term. We recommend buying a policy with a one year term, as it is next to impossible to cancel an existing policy.

2. Legal Assistance Insurance (Rechtsschutzversicherung)

This type of insurance will assist you if you need legal help from an lawyer. Legal fees and going to court can be very expensive in Germany. Fees are determined by the amount in dispute; for example, if you are being fined 10,000 Euros for not paying your rent or taxes, the legal fees of anywhere up to 8,000 Euros must be paid in advance. A legal plan can come in very useful if you have problems at work or with a landlord, with your drivers licence or with tax laws. This type of legal policy does not cover fees for divorce or separation.

3. Third-party Private Liability Insurance (Haftpflichtversicherung)

This is a very important and highly recommended insurance policy for everyone. This policy pays for accidental damage you may cause to other people’s belongings or well being. It will cover negligent acts such as knocking over a glass of wine onto a friend’s expensive carpet and accidents such as hurting someone else during a sports activity or breaking something in a shop. It is not expensive and protects your entire family from having to pay for expensive mishaps. It is very important to have third party private liability insurance for your pets such as dogs and horses. These types of animals could cause quite a lot of expense: for example, if your dog causes an accident by running out of the house onto a busy street. It will give you a much better feeling to have them insured.

4. Accidental Death and Disablement insurance (Unfallversicherung)

It seems a little strange to think about this kind of insurance, but it can make a world of difference, especially in the case of disablement. Disablement includes the loss of bodily parts such as limbs or eyes. There is a compensation chart ranging between 10% and 100% of the total insured sum depending on what part of your body has been damaged. Usually a policy for accidental death or disablement should provide coverage at a rate of 5-6 times the insured person’s yearly income.

This type of insurance must not be confused with other similar insurance policies such as occupational disability, critical illness or income replacement coverage. This policy will not pay benefits to you if you become disabled through illness.

As with other policies, a long term policy cannot be cancelled before the end of the policy period. Please make sure you read your contract well. We always recommend taking out insurance policies that have a one year renewal period.

5. Term Life Insurance (Risiko-Lebensversicherung)

This type of insurance provides a lump sum of money for the policy owner’s family or other beneficiaries in the case of death. This type of insurance is relatively inexpensive. It is calculated on your age, risk group and health status at the time of the policy is issued. If you already have life insurance from home, please make sure you are covered for the time you spend abroad.

6. Travel Insurance (Reisekrankenversicherung)

Most travel agencies offer travel insurance upon booking. This type of insurance is highly recommended if you are travelling outside the EU and will cover you for emergency hospital and out patient treatment, medically advised evacuation and emergency dental care when abroad. (Note: the German public health insurance system will provide you only with limited coverage, only for travel within the EU.) A travel insurance policy will give you coverage on all of your trips (up to a duration of 42 days) within one calendar year.

The following options can be included in your travel insurance coverage:
Cancellation insurance, which reimburses cancellation costs due to illness or injury; trip curtailment insurance, which pays for unscheduled trips home in case of illness or injury; and baggage insurance, which protects you in case of lost or stolen luggage. There is usually a maximum limit per item of luggage.

7. Income Protection Insurance (Krankentagegeldversicherung)

There are policies available that will pay a flat daily amount when you are sick and unable to work or are hospitalised for an extended amount of time. Your state health insurance will only pay a certain percentage of your income up to 42 consecutive days of being sick. After that your sick pay benefits covered by the state plan cease. Most insurance companies offer polices that allow you to cover the time beyond the 42 day period. Most private insurance companies offer different levels of coverage as a supplemental insurance. It is wise to check your health insurance policy to find out which coverage you have and what you may need to protect yourself.