Which insurance policies do you need? A guide to insurance in Germany
From personal liability to pet health insurance, Germany’s wealth of insurance options can be overwhelming. We’ll give you the rundown of the most important types and their benefits.
8 min read
Please note: this guide is intended for information purposes only, not as a recommendation to take out any specific insurance policies.Travel cancellation insurance, personal liability insurance, and all of the intricacies of health insurance—we’ll admit, Germany’s insurance landscape can feel more like an impenetrable jungle than a wide-open Autobahn. To make things easier, we put together a guide to the different kinds of insurance in Germany and the scenarios when they might come in handy for you.
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What kinds of insurance are available in Germany?
Let’s start with the good news: not every insurance policy is a decision you need to agonize over. Why? Because some of them are required by law. If you’re employed, take a look at your payslip—certain insurance contributions are automatically deducted every month.For most people, this monthly deduction includes two types of insurance: your public health insurance and state pension. There are a few different public health insurance providers you can choose from, and you’re free to switch between them. Statutory pension contributions are also deducted from your salary. If you’re self-employed, you’re generally free to choose whether you contribute towards your pension. However, statutory insurance is mandatory for some other professional groups, like tradespeople.If you drive your own car, vehicle liability insurance is compulsory for you, too. But beyond these mandatory types of insurance, there are plenty of optional insurance policies that might also benefit you.
What voluntary insurance policies are available?
There’s a huge number of insurance policies you can take out on a voluntary basis—most of them even available to buy online. But regardless of how risk-averse you are, you should always check whether it really makes sense for you to take out a particular insurance policy.To help you figure all of this out, we’ve listed some of the best-known policies in this guide. We’ve also drawn up example scenarios so you can see which insurances might match your life situation. Read on for our overview of the different insurance policies you can take out, what they usually cover, and how they might benefit you.
Personal liability insurance
One of the most important voluntary insurance policies is personal liability insurance (Privathaftpflichtversicherung). If you cause damage to others’ property, personal liability insurance covers some or all of the repair or replacement costs—sparing you a potentially major financial headache.
Occupational incapacity insurance
It’s safe to say that most of us hope to stay healthy and accident-free at work. However, if physical or mental issues leave you incapable of performing your job, occupational incapacity insurance (Berufsunfähigkeitsversicherung) will give you some protection.
Term life insurance
It might seem fatalistic, but sometimes the worst-case scenario does happen. In case you die unexpectedly, term life insurance (Risikolebensversicherung) covers those you leave behind. It can offer them security and lessen financial burdens, particularly if property loans are involved.
Fully/partially comprehensive car insurance
Commuting to work, summer road trips, doing your weekly grocery shopping—a car can make your daily life a lot easier, especially if you don’t have access to public transport. Your mandatory vehicle liability insurance already covers you for any damage you might cause to others on the road. However, if you want to protect your own car from damage, it can be a sensible choice to get fully or partially comprehensive car insurance (Vollkasko- or Teilkaskoversicherung). Full coverage is often recommended if your car is new or high-end, whereas partial coverage is fine for older models.
Legal protection insurance
Legal protection insurance (Rechtsschutzversicherung) protects you against the costs of any legal disputes that may arise. And yes, this type of insurance applies more to special circumstances than day-to-day situations. If you do take out legal protection insurance, check the contract and make sure it clearly regulates which areas of your life are covered.
Various insurance scenarios
So, travel is your passion, you’ve become self-employed, or you’ve just spruced up your flat? Let’s look at a few typical life scenarios and the types of insurance that can be useful.
Scenario: The Homebody
We spend a lot of time within our own four walls: working from home, hosting a buzzing birthday brunch, or chilling on the sofa on a Sunday. Unsurprisingly, we invest a lot in furnishing our homes. So, it’s understandable that lots of us want the protection of home insurance, such as the following two policies.
We often put a lot of time and care into decorating our homes—like that days-long debate over which couch to choose. If your belongings are then stolen or damaged—say, by a burst pipe—it’s not just an annoyance: it can also be expensive to replace them. Household contents insurance offers financial protection for you in cases like this.
Residential building insurance (Wohngebäudeversicherung)
Own your own home? Then you’ve probably heard of residential building insurance—although hopefully you haven’t had to make use of it yet. It protects you if your building is damaged by lightning, storms, hail, or fire.
Scenario: The Business Owner
Already self-employed or thinking about taking the plunge? There are insurance policies that might especially appeal to freelancers and business owners.
Daily sickness benefits (Krankentagegeld)
Daily sickness benefits apply to freelancers and people covered by private insurance. If you can’t work and lose your income due to illness, daily sickness benefits will step in and ease the financial hit.
Basic pension coverage (Basisabsicherung Rente)
We get it: Especially when you’re young, planning for retirement seems like a task you’d rather save for later. However, basic pension coverage is important if you’re self-employed. You can either opt for a statutory pension or choose a “Rürup pension,” a private pension product. Either way, it’s best to start thinking about the future today—at least a little bit.
Scenario: The Jetsetter
A weekend break in Paris, a beach holiday in Mallorca, an adventurous voyage to South America—you love discovering the world but want to be covered in case things don’t go to plan? Here are two insurance policies you might want to consider.
What happens if you book a pricey trip in advance and then can’t go? Travel cancellation insurance could help you avoid losing money in this situation. But it’s worth checking in advance when the policy comes into effect, if it has any exceptions or limitations, and what the cancellation fees for your trip would be without cancellation insurance—simply paying the fees might turn out to be less expensive.
Travel health insurance (Auslandsreise-Krankenversicherung)
Ideally, you’ll come back from your holiday healthy and well-rested. If you do get sick while you’re away, it can be an expensive experience—from minor doctor’s visits to hospital stays, or even repatriation in an emergency. If you have public health insurance in Germany, it might be valid within the EU. Check before your trip if you're covered by your statutory health insurer and if there are any restrictions. Then you can decide whether to take out additional travel health insurance. If you’re traveling beyond the EU, you definitely need to look into this.
Scenario: The Animal Lover
As much as we love them, pets can cause significant costs or damage. If you have a furry friend at home, you’ll probably have heard of these two kinds of insurance that help protect you from sudden expenses.
Pet health insurance (Tierkrankenversicherung)
It’s not just humans who need healthcare: Our pets might also need quick check-ups or even an emergency operation. You can take out health insurance for your pet, which covers the costs of veterinary visits. That said, this might not be an option if your pet is old—their health condition is a factor. Alternatively, operation cost insurance might be a more sensible option.
Pet liability insurance (Tierhalterhaftpflichtversicherung)
You might not be the one wreaking havoc yourself, but if your pet causes damage to property that isn’t yours, you’re still responsible. To prevent your four-legged friends from leaving you penniless, it can make sense to take out animal liability insurance—especially if you’ve got dogs or horses. In some states in Germany, liability insurance is actually mandatory for dog owners.
Other insurance policies
The world of insurance doesn’t just include large items like furniture or cars. For example, public health insurance only covers a certain portion of the costs for dentures. So, it can make sense to take out additional dental insurance if your trips to the dentist are often on the pricier side. And you can even insure “smaller” parts of your life now—like your electronics and other devices.
Insurance at N26
So, you’ve got a better grasp now on which types of insurance are relevant for you? If you’ve decided it’s time to take out another policy or two, we’ve got good news. With the N26 Metal and N26 You premium accounts, you benefit from travel and lifestyle insurance policies—for travel cancellation, lost baggage, and flight delays and more.You’re free to add other insurance policies at any time with every N26 account. With electronics insurance, you can protect your laptop or tablet from theft or damage. Just open your N26 app to set up and manage your insurance policies.Still don’t have an N26 account? Then it’s time to discover the account that suits you and your lifestyle—online, easy, and streamlined. With N26, you can experience 100% mobile banking: It’s super simple and it all happens in your N26 app.
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