Learn about liability insurance in Germany and why it's worth having. Protect yourself and your family from financial risks with liability insurance.
Private liability insurance covers financial risks in three areas when you cause damage to third parties. The condition is that you are responsible for this damage and can be held liable for it. If the damage was intentionally caused, regulation is naturally excluded. If this damage was caused unintentionally, through simple or gross negligence, your private liability insurance comes into play.
Personal Injury: This is covered if you cause physical harm to another person. Similarly, financial compensation is covered for ongoing physical or psychological impairments.
Property Damage: If you accidentally damage someone else's property, the damage is regulated by your private liability insurance.
Financial Loss: Damages you cause to others purely in an economic sense, without causing injury or property damage, are insured.
Explanation of Legal Liability: Regarding legal liability, the Civil Code contains the following wording: "Whoever unlawfully intentionally or negligently injures the life, body, health, freedom, property, or any other right of another person is liable to compensate the other for the resulting damage."
The insurance company providing your personal liability insurance has three primary roles. In the event of a claim, the insurance company first assesses whether there is a liability claim against you for the damage incurred.
Passive Legal Protection: If you cannot be legally held liable for damage, but someone is trying to hold you responsible, you have passive legal protection. In case of doubt, the insurer will even go to court on your behalf to defend an unjustified damage claim. The insurer covers all costs associated with the procedure.
Settlement of Compensation Claims: If you are liable, the insurer takes care of the financial aspects. They regulate the damage incurred so that you can handle the costs.
When Does Private Liability Insurance Not Pay Out? Different insurers have various exclusions. It should be clear that private liability insurance does not cover damages intentionally or deliberately caused by you. Or if the damage is related to a criminal act. For families, it's important to note that no compensation is provided if family members under the same policy harm each other.
Other Liability Insurances: In various areas, such as professional liability insurance, pet owner's liability insurance, environmental damage liability insurance, builder's liability insurance, property owner's liability insurance, and drone liability insurance, specialized policies are needed.
Is Private Liability Insurance Worth It? Yes, there's not much more to say at this point. The insurance secures you and your family's livelihood if something wrong.
Your private liability insurance must include a broad range of coverages to protect you and your family comprehensively. Choosing the right coverages ensures you are well-protected in various situations.
High Insurance Sums: One of the most important aspects is the coverage amount. It is recommended to choose coverage of at least 15 million euros. This amount might seem high, but considering the potential financial consequences of damages, it's a reasonable precaution. A higher amount has minimal impact on premiums while providing comprehensive security.
Loss of Claim Recovery Coverage: This coverage is highly relevant if the person causing the damage doesn't have liability insurance and inflicts significant harm on you. Your insurance covers the damage and then tries to recover the money from the responsible party. This protects you from being left empty-handed if the responsible party cannot pay.
Liability for Incapable Children: Children under seven are not legally liable. However, "fulfilling the duty of supervision" can still lead to harm. Separate coverage for incapable children can help avoid potential conflicts if your child causes damage to others.
Rental Property Damages: If you live in a rented apartment, it's essential that the insurance also covers damages to the fixed inventory. This protects you from the financial consequences of accidentally caused injuries, such as floors, doors, or sanitary facilities.
Loss of Keys: Losing keys can be frustrating and, in some cases, costly, especially if professional keys are involved. Coverage for crucial loss can cover the cost of replacing locks and keys.
Damage by Goodwill: Often, we help friends or acquaintances voluntarily and without payment. However, injuries that arise during such assistance can be taken care of. This protects against unforeseen costs that may arise from your helpfulness.
Coverage for Borrowed Items: Borrowing items from neighbours or friends is commonplace. If damages occur during such borrowing, it makes sense for these costs to be covered by your liability insurance.
Coverage for Pets: Especially for pet owners, it's advisable to have coverage for pets. Dogs and horses can cause damages in certain situations where you could be held liable.
Unique Risks: If you engage in dangerous hobbies or activities, it's essential to cover these particular risk areas, including horseback riding, kite-surfing, jet skiing, model aircraft, or drone flying. These risks are often excluded by default and should be added individually.
Enhanced Precaution and Best Performance Guarantee: An enhanced precaution clause is a real highlight in your insurance contract. It ensures that your insurance performs in the event of a claim just like the policy with the best performance in that area. This gives you the certainty that you will always enjoy the best protection. This clause is usually slightly more expensive but highly recommended as it provides comprehensive security.
Wide Selection of Providers: There are numerous insurance providers in the market. We help you find the best options that perfectly match your needs. We consider insurance companies' coverages, costs, and reputations to ensure you receive the optimal range.
These comprehensive coverages ensure that you are well-protected in various situations and don't have to bear the financial consequences of damages yourself. I think it's best to carefully consider which coverages are most relevant to you and your circumstances to select the best possible private liability insurance for you.