Personal Liability Insurance in Germany Explained
What you are liable for in Germany, what personal liability insurance (Privathaftpflicht) covers and leaves out, and what to check in your policy.
Personal liability insurance (Privathaftpflichtversicherung) pays when you accidentally cause damage to someone else in everyday life and are legally liable for it. It is not mandatory in Germany. Even so, it is one of the most important policies you can have, because German law sets no upper limit on this liability: you answer for it with your assets and, if necessary, with your future income.
Many people who are new to Germany hear in their first weeks that they "must" have liability insurance, but rarely why.
The principle: if you cause damage, you pay
The basic rule is in § 823 BGB (opens in a new tab) of the German Civil Code: anyone who intentionally or negligently and unlawfully injures another person's life, body, health, property or other rights must compensate for the damage. Negligence means that a moment of carelessness is enough. The law sets no ceiling on the compensation.
Many everyday damages are small. It becomes serious when a person is hurt. Then treatment costs, lost earnings and in some cases a lifelong pension can fall to you, and savings rarely stretch that far.
The insurance pays justified claims, and it defends you against unjustified ones (§ 100 VVG). The second part is easy to overlook. If someone demands more than they are owed, the insurer examines the claim and negotiates, so you are not dealing with it alone.
Everyday situations
- You are cycling, get distracted for a second and collide with a pedestrian. Cycling is part of private life and is normally covered.
- Through a moment of carelessness, water escapes from your rented flat and damages the flat below. It is a different case if you damage something in your own rented flat that belongs to the landlord, such as the washbasin: that is a Mietsachschaden (damage to rented property), and policies handle it differently.
- You drop a friend's laptop. Whether borrowed or rented items are covered depends on the policy.
- You help a friend move and drop their television. With favours like this, it is often unclear whether you are legally liable at all. Some policies pay such Gefälligkeitsschäden anyway.
- Your five-year-old scratches the neighbours' car. Under § 828 BGB (opens in a new tab), a child under seven is not liable for damage; for accidents involving motor vehicles, this applies until the child turns ten. Parents are only liable if they failed in their duty of supervision. Often nobody has to pay, which can strain things with the neighbours. Some policies cover these damages anyway.
- You lose the key to your rented flat or your office. A whole locking system may then need replacing, and this too is a separate point in the policy.
What it does not cover
- Damage you cause on purpose (§ 103 VVG).
- Damage to your own things. The policy covers what you do to others.
- Damage with a car or motorbike. That needs motor liability insurance (Kfz-Haftpflicht), which is compulsory for vehicle keepers.
- Damage caused by dogs or horses. These usually need a separate animal owner's liability policy (Tierhalterhaftpflicht).
- Damage arising from your job or business. That belongs in professional or business liability insurance.
- Damage that insured family members in the same household cause to each other. This is usually excluded.
Single, couple or family
A single policy covers only you. A family policy normally includes a spouse or registered partner and the children, usually while they are in school or their first vocational training or degree. If you live together without being married, many policies require your partner to be named explicitly.
So look at your policy again when your life changes: when you move in together, marry, have a child, or when a child finishes their education. After moving in together, couples sometimes still have two policies when one would do.
Questions to ask of your policy
The price says little about a policy. It is more useful to go through your own terms with these questions:
- Is the sum insured (Deckungssumme) high enough for a serious personal injury? The consumer advice centre Verbraucherzentrale (opens in a new tab) publishes the minimum it considers sensible. With older policies in particular, check whether yours still matches it.
- Is damage to your rented flat (Mietsachschäden) included, and up to what amount?
- Does the policy pay Gefälligkeitsschäden, damage you cause while helping someone out?
- Are borrowed and rented items covered or excluded?
- Does cover for lost keys apply only to private keys, or to work keys as well?
- Does the policy pay for damage caused by a child under seven who is not liable for it?
- Is there default cover (Forderungsausfalldeckung)? It applies when someone damages your property and has neither insurance nor the money to pay. The terms set out what you have to do first.
- Do you pay an excess (Selbstbeteiligung) on every claim?
German terms you will meet
| Term | Meaning |
|---|---|
| Privathaftpflichtversicherung | Insurance for damage you cause to others in private life. |
| Deckungssumme | The maximum the insurer pays per claim. |
| Mietsachschaden | Damage to a rented flat or rented room. |
| Gefälligkeitsschaden | Damage caused while you help someone without payment. |
| deliktunfähig | Not legally responsible, for example as a child under seven. |
| Forderungsausfalldeckung | Your insurer pays when the person who damaged your property cannot. |
| Selbstbeteiligung | Your own share of each claim (the excess). |
Common questions
Is liability insurance mandatory in Germany?
Personal liability insurance is not compulsory. Motor liability insurance is, for every vehicle keeper. The Verbraucherzentrale still calls personal liability insurance a must for everyone, because the liability it covers has no upper limit.
What does personal liability insurance cover?
It covers damage you negligently cause to other people or their property in private life, from cycling to mishaps at home, and it defends you against unjustified claims. What exactly is included, for example rented property, borrowed items or lost keys, depends on the policy terms.
What is the difference between liability and personal liability insurance?
"Liability insurance" (Haftpflichtversicherung) is the umbrella term, and personal liability covers your private life. Alongside it there are, for example, motor liability, animal owner's liability and professional or business liability, each for its own risk.
What I look at in a first conversation
Have your current policies ready, ideally with the policy document (Versicherungsschein) and the terms. I look at when each policy was taken out and which of the points above it includes, who lives in your household and whether that is about to change. We clarify whether you rent, own or let out a flat, and whether a pet, volunteer work or a vehicle needs its own cover. I also check for duplicates, such as two policies after moving in together.
Sometimes it turns out that everything fits. That is a good result too.
The first conversation is free and non-binding, in Stuttgart or online, in Persian, German or English. Call me or send an email; the details are on the contact page. There is more on other policies on the insurance page, and my article on disability insurance explains why your income deserves protection too.
