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Insurance for Expats in Germany

Submitted: October 2013

Fundamentally, insurance (Versicherung) is mainly a financial service which is designed to reduce risks. An insurance product transforms the cost of your potential large liabilities or expenses into regular premiums. An insurance product “ensures” that your situation is more stable/less risky than what it would otherwise be, but it is certainly not a way to evade the liabilities you are potentially responsible for.

Do not wait for problems to arise before reviewing your insurance arrangements. Once you have a problem, it is already too late. Being poorly insured is risky whereas being over-insured is expensive.

There is a wide range of competing insurance providers in Germany, and it is advisable to shop around and compare before taking out an insurance policy. Due to the large competition, German insurers may accept attractive prices and ultra-low profit margins.

If you are unclear about your cover or your needs whilst you are in Germany, you might wish to check your existing insurance arrangements in your country of origin. This is important if you want to avoid double coverage.

Insurance isn’t necessarily a country-specific issue, but how much insurance you need may vary from one country to another. This is because your potential liabilities, such as medical bills, are specific to a jurisdiction.

 

Home insurance

Your home insurance needs depend on whether you own your home, or if you rent it.

A buildings insurance policy (Gebäudeversicherung) protects you against damage to your building, and is generally required to secure a mortgage. This may cover the costs of rebuilding your property from scratch or the costs of certain exceptional repairs. Do also expect home insurance to be a requirement if you intend to apply for a mortgage.

As for all insurance policies, it is up to you to decide how generous you want your cover to be, what the excess amounts are, which unexpected expenses are covered (e.g. alternative accommodation or legal costs), etc.

Tenant insurance (Hausratversicherung) can be much cheaper than home insurance, but it only covers your belongings.

Going away from home

If you expect to be away from your home for more than one month, you should let your insurer know. Failure to do so may result in a claim being rejected if something happens to your home whilst you are away.

Home insurance exclusions

Check if something is excluded from your home insurance policy. If you live in a high risk area (e.g. with regard to floods), your insurer may require you to pay extra to be covered on some risks that your insurer would otherwise exclude.

 

Car insurance

Car insurance is mandatory in Germany, and your policy must generally include at least third party cover. This should insure you against potential liabilities for third party death or bodily injury, but not damage or theft of your own car.

If you need your vehicle to have more than just third party cover, you might wish to take out a comprehensive vehicle insurance policy. As car insurance can be expensive, you should take some time to shop around and negotiate fair quotes.

 

Public liability insurance

Any individual living in Germany should have public liability insurance (Private Haftpflichtversicherung), no matter what they do for a living. Public liability insurance is designed to cover the costs you may have should you have an accident – even as a pedestrian – as a result of which you would have to pay alimony for the rest of your life.

These insurance policies are generally quite cheap (from as little as €60), but they are only designed to cover you as a private individual.

 

Life insurance

Life insurance (Lebensversicherung) can be particularly helpful if your family is financially very dependent on you, as it may guarantee a lump sum payment to your family if you die. Do assess carefully the burden of retaining foreign life insurance while you are resident in Germany. Do also check the geographical extent of your existing life insurance policy when you move across borders.

 

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