Your guide to the most important insurances in germany
As a new foreign resident in Germany, these are the insurances which are a “must have”
Most people who move to Germany to live and work have, or have had, insurances tailored to meet the laws, regulations and needs of the country or countries they have previously lived in.
Now, however, you need to look carefully at your portfolio in the light of the requirements that need to be met here in Germany. And here a specialist in insurance affairs related to expats is essential to help you discover which insurance you really must have here and also tailor it to meet your personal requirements
Insurances which are required by law.
Which insurances am I compelled to have?
By law, there are three types of insurance policy which you must have in Germany, dependent on your situation. However, health insurance is a legal requirement for every single resident.
Germany has a reputation for having one of the best health care systems in the world, providing its residents with comprehensive health insurance coverage. However, it is compulsory to have health insurance whilst living and working in Germany.
There is a dual system in place which means residents have a choice between private health insurance and state (Statutory) health insurance, provided certain criteria are met. Approximately 85% of the population are either mandatory or voluntary members of the state health scheme while the rest have chosen to have private health insurance.
There are many factors to consider in choosing the right policy for you and this is covered in more detail in.
(Link to Health Insurance)
It is important to note that situation is complex and a qualified and experienced insurance broker specializing in expatriates is in a position to help you find the most suitable cover, and to avoid the mistakes and pitfalls that could otherwise lie in wait, at no extra cost to you.
If you think you have an adequate healh insurance already, please get an expert to check it, as virtually all insurances issued by overseas insurers do not meet the German requirements and will not be recognised as an adequate or valid health insurance.
Long Term Care Insurance
This is normally contracted along with the health insurance. It is difficult for ex-patriate residents to obtain this insurance on its own as the insurers are reluctant at best, to issue policies until several years residency has occurred.
Third Party Vehicle Insurance
If you own or use a vehicle it is compulsory to have a third party vehicle insurance. If you are caught driving without third party insurance the penalties are harsh. It is not regarded in law as a road traffic offence, but as a crime. Penalties range from up to six months imprisonment and a fine in the case of negligency, to a years imprisonment and a fine in the event of a premeditated offence.
You will also be given up 6 points in the register in Flensburg. With 8 points you lose your driving licence.
And what types of insurance is it advisable to have in Germany?
There are two types of insurance which should be regarded as both necessary and sensible. Not having them can lead to your livelihood being seriously threatened in the event of accidents or illnesses.
Private third-party (indemnity) insurance.
(Private Haftpflicht Versicherung)
Should you cause injury or damage to property of another person, the claims against you can be astronomical, even if they result entirely by accident. In such a case, without insurance you could forfeit all your property, belongings and savings.
In addition, if you are planning to rent a property to live in here in Germany, most landlords will insist that you have third party insurance.
The cost is relatively small, around € 60 per annum and, importantly, if you have a family, your children are also covered.
Occupational Disability Insurances
Figures show that one in four working people are not able to continue in their original line of work throughout their working life, due to disability of one form or another.
A psychological reason is the most common cause, followed by disease and accidents.
This leads to it being impossible to continue with the accustomed standard of life.
The state occupational disability pension provides only about one third of the last gross salary and will only be paid out after 5 years of contributions into the state social security system. This is in itself often a problem for foriegners coming to work in Germany, as it means you have no cover at all for five years, and subsequently very low benefits in comparison to your previous income.
The premiums for a private occupational disability insurance are influenced by your state of health, whether your occupation is sedentary or manual, whether occupational hazards apply, and by your age. It is therefore advisable to secure such an insurance as soon as possible.
Sickness Daily Allowance Insurance
If you are insured with a statutory health insurance, you should definitely think about a hedge in case of illness, because after 6 weeks the salary payment ends and the employer makes no further payments.
Thereafter, the statutory health insurance pays the sickness benefit in the amount of
90% of the net salary, but no more than 70% of the contribution ceiling.
In addition, the social security payments will be deducted from the benefits. On average, only 75% of the original net income is disbursed, leaving a shortfall of 25% of income and this can often lead to financial problems in just a few weeks.
Thshortfall can be compensated by a private sickness daily allowance insurance. Especially for employees with a high income, an additional private insurance of this kind
Example : Calculating sick pay
Mr A, according to his last pay slip earns €3,000 brutto monthly. He is unmarried, 34 years old and has no children. His monthly net earnings are 1,887.39 Euro.
Here, an individual health insurance company supplement of 1.1 % is taken into account
Basis for calculation
Amount in Euro
Monthly gross earnings
Monthly net income (Income tax group 1, no children)
70% of gross earnings
90% of net income
Monthly sick pay
Less pension scheme contribution (9.35%)
Less unemployment insurance contribution (1.5%)
Less care insurance contribution (1.275%)
Loading for childless persons (0.25% of 80% of gross earnings)
Monthly sick pay – net
Daily sick pay gross
Daily sick pay net
Difference from net income
Property insurances it is sensible to have.
Other than the insurances mentioned above, there are a number of property or person insurances which it is sensible and prudent to have. In the main the monthly premiums are relatively small but help to protect the value of the physical assets you have or will accrue.
Household contents insurance.
Covers against damage or loss which is not self inflicted for all items within the household, such as resulting from burglary, flood or fire, and in most cases of accidental damage or loss. Here attention should be paid to the range of cover and financial limits in choosing the right policy for you.
Animal liability insurance
Advisable for all pet owners, to cover costs in the event that the pet causes physical damage to the person or property of others
Insures you in the event of an accident against one off costs or those arising from temporary or permanent changes required to be made to cope with the results of the accident.
For those with health problems which prevent them taking out an occupational disability insurance (Berufsunfähigkeitsversicherung) (see above) it enables you to at least provide for yourself in the event of being unable to work as the result of an accident.
Legal Expenses Insurance
Particularly in difficult legal conflicts, this type of insurance can be essential.
Most importantly, it enables you to obtain legal advice and guidance that may otherwise be financiallyout of reach.
Who has what insurances?
Although following the herd is not always the best thing, seeing the direction in general terms can be a useful guide. The table below shows which insurances are most often taken out. For instance, over 80% of the population in Germany have household contents insurance.
There is a wide range of types of insurance available, almost all of which are specifically tuned to the German market and the German legal requirements.
Some of them are easy to understand, some very complicated, and some which overlap.
It is at least prudent to seek the help of an advisor and licenced agent experienced in this market and in dealing with expatriates and a good command of English. As stated above, their advice will cost you nothing extra and could save you considerable time, money and problems.