Do I Need Liability Insurance in Germany?

Personal liability insurance is not required by law in Germany. Yet landlords ask for it, colleagues are surprised if you don't have it, and almost every household pays for it. The reason is in the German Civil Code: if you cause damage to someone else here, your liability has no upper limit. If you have just moved to Germany, personal liability insurance belongs right next to health insurance on the list of the first contracts you should sign.

Mandatory or not? The short answer

As a private individual, you are not obliged to have liability insurance for everyday life. It only becomes compulsory in special cases:

• Car, motorcycle, e-scooter: Every vehicle that needs registration or a plate needs motor liability insurance. For an e-scooter, that is the small insurance plate which changes every year on 1 March.
• Dog: In Berlin, Bremen, Hamburg, Lower Saxony, Saxony-Anhalt, Schleswig-Holstein and Thuringia, every dog must have liability cover. Other states, such as North Rhine-Westphalia, only require it for large dogs or breeds classed as dangerous. You need separate dog liability insurance for this.
• Certain professions and activities: Doctors, lawyers and hunters need professional or hunting liability cover. As an employee, this normally doesn't affect you.

For everything else, such as a bike accident on your way to work, a water leak in your rented flat or a colleague's phone you knock off the desk, there is no compulsory insurance. That is what voluntary personal liability insurance is for.

Why almost everyone here has it anyway

Under Section 823 of the German Civil Code (BGB), you must compensate any damage you cause to someone else through fault, and slight carelessness is enough. There is no cap. You are liable with your salary, your savings and everything you will earn in the future. A creditor can enforce a court judgment against you for 30 years.

Damage to property usually stays manageable. It gets expensive when a person is injured. If you hit a pedestrian with your bike and they can no longer work, medical costs, compensation for pain and suffering, lost earnings and possibly decades of care add up. The injured person's health insurer and pension fund pay first and then claim the money back from you. Cases like this easily reach six or seven figures.

Many countries handle this risk differently, for example through state accident schemes or as part of home contents insurance. In Germany it is a separate contract, which is exactly why so many newcomers don't have one.

Flat hunting: what your landlord can ask for

At viewings in larger cities you will often be handed a tenant self-disclosure form (Mieterselbstauskunft), and next to proof of income and a Schufa credit report it frequently asks about personal liability insurance. Some rental agreements even require it. No law obliges you to have it, and whether such a clause in a standard rental agreement is valid is legally disputed. With a premium of a few euros a month, though, the argument is hardly worth having if you want the flat.

In practice: take out personal liability insurance before you start viewing flats. You usually receive the confirmation of cover as a PDF right after signing and can add it to your application.

Your deposit doesn't replace liability insurance, by the way. Under Section 551 BGB, the landlord can ask for up to three months' net rent as security, and if you damage something in the flat, they deduct it when you move out. With liability insurance that includes damage to rented property, the insurer pays and you get your deposit back. If you're short on cash for the deposit right now, a rent deposit insurance is an alternative to a blocked savings account.

Two features that matter most for tenants

Cheap and good policies often differ exactly where it matters most for newcomers in a rented flat:

• Damage to rented property: If the washing machine leaks and the parquet swells, or a perfume bottle drops into the washbasin and cracks it, that is damage to the rented property. Good policies cover such damage to living space. Normal wear and tear, glass breakage and damage to heating, boilers and electrical or gas appliances remain excluded.
• Lost keys: Many apartment buildings in Germany use a central locking system. If you lose your key, the landlord can demand that every lock be replaced, which quickly costs several thousand euros. Make sure both private keys and the key or fob from your employer are covered.

I've covered the other points that matter when choosing a policy, such as default cover and damage caused while doing someone a favour, in my guide to the price trap in personal liability insurance.

Does your policy from home still cover you?

Many expats arrive with liability cover from home, for example as part of a renters or homeowners policy from the US or a contents policy from the UK. These contracts usually assume you live in your home country and only cover trips abroad of a few weeks or months. Once you register your address in Germany, your main residence is here, and the cover can lapse without anyone telling you.

Read the terms of your existing policy carefully or ask your insurer in writing. The safer route is a German policy that landlords and injured parties recognise and that is settled under German law. Cancel the old policy once the new cover is in place.

Family, partner and children

A family policy usually costs only a little more than a single one. It covers your spouse or registered partner and your children, normally until the end of their first vocational training or degree. Many policies also include an unmarried partner living in the same household, but you often have to name them in the contract.

Children come with a special rule: under Section 828 BGB, children under seven are not liable at all, and in road traffic not until their tenth birthday. If your four-year-old scratches the neighbour's car, the insurer technically doesn't have to pay, and the neighbour is left with the damage. Good policies pay for damage caused by such children anyway, which keeps the peace in the building. If your family joins you in Germany a few months later, simply switch your contract to a family policy.

What personal liability insurance doesn't cover

To set the right expectations: liability insurance never pays for damage to your own things, that's what household contents insurance is for. Damage caused by your dog or your car is handled by dog liability and motor insurance, and if you are bringing a car from abroad, read about the no-claims class trap for expats first. A pedelec up to 25 km/h, on the other hand, is covered by personal liability insurance. Mistakes at work are covered by your employer's business liability insurance, and under German case law employees are not liable for slight negligence on the job anyway. If you work freelance, you need your own professional indemnity or public liability insurance.

What it costs and how to sign up

Personal liability insurance in Germany usually costs around 40 to 120 euros a year for singles and around 60 to 180 euros for families. The sum insured should be at least 50 million euros. A cheap and a good policy are often only 20 or 30 euros a year apart in price, but whole clauses apart in what they pay.

The contract documents are always in German, and legal German is hard reading even for native speakers. As your fiduciary representative, I compare policies from a broad market selection and explain the differences to you in English or German. You'll then find the contract together with all your other policies in the simplr app, including the confirmation of cover for your landlord. If you leave Germany later, you cancel the policy when you move away. Which other insurance matters after you arrive is covered in my guide Relocating to Germany.