There are a number of types of insurance in Germany for expats to consider, some compulsory and some optional. Here’s an overview of insurance coverage in the country.
Insurance is one of the key considerations when moving to a new country. When thinking about insurance in Germany, you’ll need to decide on what types of insurance you will need as well as shopping around to find the best deals. This helpful guide provides everything you need to know about German insurance, including the following:
- Overview of insurance in Germany
- Which insurance in Germany is legally required?
- Optional forms of insurance in Germany
- Expat insurance in Germany
- Insurance companies in Germany
Clements Worldwide provides international insurance solutions to expats around the world. Their Auto, Personal Property, Income Protection, Life, and Health policies for the global community come with superior service and over 70 years’ experience. So, with Clements Worldwide you'll have the right protection wherever you are in the world.
Overview of insurance in Germany
Germans tend to take insurance quite seriously. There are many different forms of insurance offered by companies covering pretty much every risk you can think of. Consequently, it can sometimes be difficult for newcomers to the country to work out how much insurance they should take out and many people end up either under-insured or over-insured.
The key to buying insurance in Germany is to shop around and find the solution that’s right for your particular situation. There are many different insurance companies to choose from, all offering different packages.
The German insurance market is regulated by the Federal Financial Supervisory Authority (BaFin) and most companies belong to the German Insurance Association (Die Deutschen Versicherer – GDV), which has around 460 members. Keep an eye on the media, insurance-related websites, consumer guides and check consumer comparison tools to make sure you are getting the best deal.
Many insurance companies, including both German and international insurance firms, offer packages to expat residents tailored towards their specific needs. Expat-friendly insurance brokers such as Popsure will offer expert advice to expats in Germany on finding and managing your insurance packages, in a language you understand.
Visit our directory to find more insurance companies and insurance brokers in Germany.
Which insurance in Germany is legally required?
Health insurance (krankenversicherung) is compulsory in Germany if you live or work there. There is a dual system of public and private health insurance. You will be automatically covered by state health insurance (gesetzliche krankenversicherung – GKV) if you work in Germany and earn between €4,950 and €59,400 a year before tax, unless you are self-employed.
GKV also usually includes nursing care insurance (pflegepflichtversicherung). Employers cover half of the health insurance costs (excluding the supplementary charge) with a maximum contribution of €323.03 a month for health care and €56.42 a month for nursing care.
Private health insurance (private krankenversicherung – PKV) is there for those not entitled to GKV and those who would prefer to take out a private plan.
Some of the largest health insurance companies in Germany include:
You can compare private health insurance providers in Germany and get free quotes on our special Expatica health insurance page, and read Expatica’s guide to health insurance in Germany for more detailed information.
If you work in Germany, you automatically pay towards a few additional forms of insurance besides health insurance through social security contributions (sozialversicherungsbeiträge). These consist of:
- Unemployment insurance (arbeitslosenversicherung) – payments split between employer and employee. This entitles you to unemployment benefits if you are out of work and meet certain criteria.
- Statutory pension insurance (rentenversicherung) – German state pension. See the guide to pensions in Germany for more information.
- Statutory accident insurance (gesetzliche unfallversicherung) – this is completely paid by the employer and covers treatment costs after work-related accidents or illnesses.
For more detailed information on these forms of insurance in Germany, see Expatica’s guide to German social security.
Car insurance (Kfz versicherung or autoversicherung) is mandatory for all drivers in Germany. You’ll need to show proof of up-to-date car insurance to register a car in Germany and get a valid license plate. Car insurance in Germany is broken down into three types:
- Third party liability (haftpflicht) – the minimum legal requirement, covering all damage to third parties and other vehicles in the event of an accident. It doesn’t cover damage to your own vehicle if the accident was your fault.
- Partial coverage (teilkasko) – this covers third party liability plus damages to your vehicle caused by things such as theft attempts, fire damage and storm damage.
- Comprehensive coverage (vollkasko) – this covers everything above plus damage to your own vehicle, even in cases where the accident was your fault.
Insurance costs increase in line with the amount of coverage you opt for, plus they depend on several factors including age, driving experience, driving record and value of your vehicle. Germany, similar to many other countries, operates a “no claims bonus” system meaning that insurance costs reduce the longer you go without having an accident. If you move to Germany and bring a vehicle from abroad, you may be able to use your existing insurance for a limited period of time. If you have a good driving record in your home country, ask your insurer to write a letter of support as this can often be used to get a discount on your car insurance in Germany. See more information in Expatica’s guide to driving in Germany.
Optional insurance in Germany
Personal liability insurance
Anyone living in Germany should consider taking out personal liability insurance (private haftpflichtversicherung). This covers injury or damage to other persons or their property. You can get single person coverage or choose to cover additional members of your family. This insurance does not cover damages that have been caused by your car (you need to take out a separate vehicle insurance for this).
In German law there is no limit to the amount someone can claim against you, so personal liability insurance helps avoid the risk of a nasty incident causing you great financial harm. Costs are not too expensive and you can find good comprehensive coverage for under €100 a year.
Forward-thinking insurance company Lemonade offers flat-fee premiums and fast payouts on claims, and donates extra claim money to good causes – such as funding meals for the needy or water wells in Africa.
Household contents insurance
Household contents insurance (hausratversicherung) is not compulsory in Germany but you may find that it is a requirement of rental contacts, especially in furnished properties. This insurance covers damage to the contents of your home due to things such as fire, mains water, storms, theft and vandalism.
Costs vary depending on the value of your contents and how much you decide to cover. Basic policies can be found for less than €50 a year. In Germany, the average cost of replacing all household goods is around €650/m2 so it’s advisable to insure to at least this if you have valuable goods. Try to keep a list of all insured items (and receipts if possible) along with photos of more valuable items. In big cities, bicycle theft can be a problem. If you own an expensive cycle, check whether this can be included or whether you need to take out an additional policy.
Expat-friendly insurance companies that provide personal property and contents insurance in Germany include:
- Clements, with its wide coverage and solid international reputation
- Lemonade, that donates extra claim proceeds to charities
If you own or are buying a home in Germany, building insurance (wohngebaudeversicherung) is advisable to protect the property against damage from occurrences such as fire, water, storms or vandalism. If you are renting property, this insurance should be taken out by the landlord.
Property insurance will normally cover the building walls, floors, roof, basement (if there is one) and windows (check this as windows are not always covered in the policy). You can also include garages, sheds, built-in kitchens, mailboxes, etc. for additional cost.
Taking out building insurance involves providing the insurer with a lot of information on things such as building measurements, the date your home was built and what building materials were used. Therefore it’s advisable to arrange an appointment with your insurance provider so that they can gather the correct information.
Personal accident insurance
Compulsory accident insurance is paid by the state to workers in Germany. However, the coverage is limited to accidents that occur at (or on the way to/from) work. To insure against injuries that occur out of work, many people take out private accident insurance (unfallversicherung).
This ensures that, in the event of a personal accident that limits your abilities long-term, all costs caused by the accident are covered. These costs can include, for example, care costs or alterations that need to be made to your home or vehicle. It doesn’t include loss of earnings, which is covered separately by Occupational Disability Insurance.
When working out how much coverage to have with personal accident insurance, there are different insurance models which pay out different amounts depending on the extent of your disability in the event of an accident.
Different body parts are given different values when calculating any pay-out, from loss of a finger (10%) to loss of sight in both eyes (100%). Your insurer will be able to explain the different options in full. Insurance payments are made either as a lump sum, in monthly installments or a combination of both depending on your tariff.
Occupational disability insurance
Occupational disability insurance (berufsunfähigkeit) covers income loss if you are no longer able to earn a living due to accident or injury. If you have been living in Germany for a while and paying into a pension, you will be able to claim a statutory reduced earnings capacity pension (erwerbsminderungsrente) but this only covers a small part of your income loss.
Private occupational disability insurance offers more comprehensive coverage, although the costs are high due to large numbers of people becoming unable to work. Premiums are based on age and risks associated with employment (e.g. roofers and aircraft pilots pay higher rates). High risk hobbies are also taken into account.
Life insurance (risikolebensversicherung) covers those left behind in the event of your death. Typically this is your immediate family but it doesn’t have to be – you can choose who you want to be the beneficiary of the policy. The money is usually paid out in a lump sum and will take care of those financially dependent on you as well as cover outstanding payments such as mortgages and bank loans.
Costs are calculated based on age, medical status and history, the insurance term (you can choose for payments to cover set periods, e.g. 5, 10, 25 years) and the insurance sum itself. It’s a fairly inexpensive form of insurance and will pay out on most causes of death (unless self-inflicted) but is one that should only really be considered by those with dependents and/or a mortgage.
Legal insurance (rechtsschutzversicherung) covers legal costs such as solicitor and court fees should you end up in the unfortunate position of being taken to, or taking someone else to, court. These costs can be very high so this is an insurance to consider if you don’t want to risk facing huge legal bills somewhere down the line. There are different areas that you can insure (private, traffic, work and home). Premiums range from €170 a year to cover one area, to around €340 a year for comprehensive coverage.
Nursing care insurance
If you have state health insurance in Germany, nursing care insurance (pflegepflichtversicherung) will normally be provided along with this. However, the maximum you can currently receive is €2005 a month. Average nursing home costs in Germany are around €3000 a month, meaning that those with only statutory coverage could need to pay nearly €12,000 a year themselves. Private nursing care insurance covers this difference. As it’s more of a supplementary top up insurance, the premiums are not too expensive and could end up saving you a lot of money in your later years.
Tools for comparing insurance in Germany
Financescout 24 – insurance comparison tool where you can find the best deal on a range of different insurance types (in German).
Stiftung Warentest – German consumer agency which is constantly comparing prices and products (in German).