Insurance in Germany – Which one do you need?

When living in Germany, be prepared to hear people talking about insurance all the time. You can always find insurance to insure anything you want. Germans are very organized people. They plan for the unexpected and like to have everything covered and feel safe. This is something I struggled to understand when I first moved to Germany. In this post, I will describe why Germans are so into insurance, the most common types of insurance in Germany and why you need them.

Why are German people so crazy about insurance?

Working

When I first started working in Germany, I was very afraid to let my boss see me working in the late afternoon. If she saw me still in the office at 6 pm, she would get pretty mad and forced me to go home. The reason is that if an employee works outside the office hour and has an accident from work back home, the insurance will not cover and the employer is liable. This was something hard for me to adapt to. In Hong Kong, everybody works long hours and nobody would even think about insurance for non-office hours. But the German people are very serious about it and I had to play hide and seek with my boss when I wanted to stay longer in the office.

Car driving

Another example is car driving. When I was in the US, people are pretty relaxed about it. My friends would let me drive their cars as long as I have a valid driving license. For Germans, it is a definite NO if you are not insured to drive their cars. Many car insurances only cover if the car owner (or his partner) drives the car. If your name is not on their insurance, they will never let you drive their cars. The reason is that if you have an accident, it will not be covered by their insurance.

Looking for private helpers

If you want to look for an hourly helper like a cleaning person, a babysitter, an au pair, etc., you are encouraged to “make it official”. It means that the person should be properly insured and registered if she is regularly working for you. There are several reasons for that. If something bad happens, obviously it is good that you are insured. Besides, if the person is registered, you will be able to claim tax for the amount you pay. In reality, I do know many people (mostly foreigners) who do not do it officially. They just receive the services and pay cash afterward because it is easier and cheaper. On the other hand, it is sometimes hard to find a private helper who is willing to make it official. But if you talk to a German person, they will mostly tell you that you should do things officially.

Private ground

We bought a house in Germany and there is a private ground outside our house. There are countless discussions with the other house owners here who jointly own this private ground. Many insisted that we should not allow our neighbors to walk pass our private ground. The reason is that if someone fell or has an accident while walking on this ground, we will be liable for the accident even though if the person fell on his own.

Are German people paranoid?

In the beginning, I thought the German people were a bit overreacting. It is probably because we take it easier in our Chinese culture. We don’t think about it too much. If something happens, we will deal with it by then. We think that the chance is anyways very low if something really bad happens. So, I found it sometimes very inflexible in Germany that they are so fixed to the rules. After living in Germany for some time, I can gradually understand why people are so panic about what could have happened. You can really get into some very shitty situations if things go wrong. Therefore, people all have their insurance to feel more secure.

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Most common types of insurance in Germany

If you plan to live for a longer time in Germany, you should get some understanding of the below insurances. I have to admit that I only started to think about this after living here for 7 years. And once I finalized the insurance contracts I needed, I felt the relief because I finally didn’t have to worry too much about WHAT IF something happens to me and my family.

You may not need every insurance, but you should know what they are and assess if you need them or not. The easiest way is to use check24 to compare different insurance companies for prices/ coverage and choose the ones which fit you the best. 

Note also that in most cases, you can claim tax on the amount you pay for the insurance. So, the cost is actually less than you think.

Health insurance

I find it really good that health insurance is compulsory in Germany. Unlike in Germany, we have to pay for each doctor’s appointment in Hong Kong if we do not have insurance. I know many people in Hong Kong avoid going to doctors just because it is costly to go. This is not good as a potential health problem may not be discovered when people delay going to the doctors. In Germany, health insurance covers the expense of doctor’s appointments in most cases. 

Public vs private

There are two types of health insurance: public and private. Most people have public insurance. If your salary exceeds a certain threshold, you can choose to switch to private insurance. In general, if you are young and healthy, you may save money by having private insurance instead of the public one. There are also better benefits with private insurance. For example, you may be able to get an appointment much faster.

Additional insurance

If you stay with public insurance but want to have better coverage, you can also buy additional insurance. For example, in my opinion, it is worth paying for dental insurance (Zahnversicherung) as there are so many services by the dentist which are not included under public insurance. For example, if you go for a professional cleaning at the dentist for one or two times a year, your money for the insurance is already worth it.

I regret that I bought the dental insurance too late (after discovering I have teeth issues). So now, any cost associated with the bad teeth is not insured. You should think of getting insurance when you are healthy, not after you have discovered your health problem. I understand that people do not feel the urge to get insurance if their health has no issue. But this is actually the best time to get the insurance before it is too late.

Another additional insurance I have is the alternative practitioner insurance (Heilpraktiker Zusatzversicherung). If you are Chinese like me, you will probably miss the Chinese doctors back home. To get the same treatment in Germany (e.g. acupuncture, Gua Sha, cupping therapy, etc.), it will cost a fortune. The alternative practitioner insurance allows me to afford to go to the Chinese doctor from time to time. I really love my Chinese doctor here in Germany who speaks the same language and understand my problems.

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Law protection insurance (Rechtsschutzversicherung)

This insurance is useful when you have to deal with a lawsuit. You probably think that you are a good citizen and will never need this. You are wrong. Shit happens in life more than you think. Many of my friends in Germany do have experience dealing with a lawyer. You do not need to have wrongdoing to get into this.

Renting/ Subletting a room

For example, my friend lived in a shared flat and sublet one of the rooms. Her flatmate seemed to be a nice guy with a good job. But one day, he just decided to stop paying rent. At first, he said he would pay my friend back. And you know, in the end, he never paid. My friend was also new to Germany and did not speak German. She had a hard time dealing with the lawyer on this issue.

Sometimes, you may encounter a bad landlord. They did not want to return your deposit without any valid reason. This is also the time that you may need to ask for professional advice from a lawyer.

Conflict with employer

Conflict with the employer is the most common use of law protection insurance. No matter how nice your company is, sometimes it is hard to believe what they can do to you. In the end, it is a business. I have seen so many cases that a company wanted to let go of some of their employees. HR presented a compensation package to those who were impacted and told them how attractive the package was. Do not accept the package before talking to your lawyer! It may sound attractive to get 6 months’ salary for free and just leave. But in reality, you may be entitled to a year’s salary if you fight for it. HR will likely present the lowest package possible.

For many people who do not have a law protection insurance, they may just accept the package as they have no idea how much they can get and it is too costly to consult a lawyer. With the law protection insurance, you don’t have to worry too much about the lawyer’s cost and can focus to fight for what you deserve.

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Life insurance (Lebensversicherung)

You may need this insurance if you have a partner, and especially if you have kids. In my case, I bought a house together with my husband with a 30 years mortgage. With both of our income, there is no issue to pay off the house. But what if he is not here anymore? I will be completely screwed. With life insurance, I can have more comfort in this aspect.

Besides, it is the same situation if you have kids. It will be a hard time for you raising your kids alone if your partner is gone. The money from a life insurance can help at least in the short term. Of course, you may not need life insurance if you have no dependents at all. You may still need this if, for example, you are supporting your parents financially.

Accident insurance (Unfallversicherung)

The accident insurance can support you if you are injured due to accidents. In many cases, you can get a lump sum payment if something happens to your body. Again, you may think that bad accidents may not happen to you. Unfortunately, accidents do happen more than you think. You won’t feel it because when someone has a bad accident, he may not be able to work anymore or he stays long in the hospital. So, you will normally not see this kind of person at work or in your surroundings.

My father-in-law had a bad car accident when he was in his 50s. Due to that his back hurts and he is not able to sit for a longer time. He had to quit his office job because of that and was forced to be in early retirement. Fortunately, he has accident insurance which could help him with this.

Accident vs disability insurance

For us, we have accident insurance which covers the whole family. And on top, we also buy disability insurance (Berufsunfähigkeitsversicherung). Note that the accident insurance only covers if your disability is due to an accident. Let say, if you are blind because of a sickness, your accident insurance will not cover. That is when the disability insurance comes into place. If you are disabled and are not able to work anymore, you will get a monthly “salary” from disability insurance.

In our case, we wanted to have both accident and disability insurance because normally the accident insurance pays faster. For disability insurance, it may take a bit longer until one can prove that he is really disabled and is forced to leave his job. Besides, our accident insurance covers our toddler as well. Imagine if something happens to our kid, one of us may have to quit the job to take care of the kid. That’s why it is good to have that covered as well.

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Personal liability insurance (Haftpflichtversicherung)

This covers the damage you cause for a third party’s property. For example, if you break something in a shop, or in your friend’s house. This is one of the most important insurances that you must have when you live in Germany for longer. In Germany, there is no upper limit of what you have to pay due to the damage you cause, even though if you do not intend to cause the damage. So, it is better to be safe than sorry.

Home insurance (Hausratversicherung)

This covers your household content like your furniture in case they are damaged (e.g. by water, fire, theft, etc.) We decided not to take this insurance because we do not have very expensive furniture. However, for some other people, they may need it if they want to protect their valuables at home.

Some home insurance covers also bicycle. You will need to read the contract carefully to know what is included or not. Bicycle theft is very common in Germany. If you have an expensive bicycle, it makes sense to get an insurance for it.

Besides, for some home insurance, it may include glass. Otherwise, you may need to buy separate insurance for glass (Glasversicherung). This will cover any glass damage at your home, e.g. windows, mirrors, oven door, etc.

Note also that the home insurance does not include the wall, door, roof, etc. They will be covered under the building insurance (Wohngebäudeversicherung).

Building insurance (Wohngebäudeversicherung)

This makes sense if you have your own house as it covers all the wall, roof, basement, etc. Either you live in the house yourself or if you sublet it to your tenants, it is a necessary insurance to cover the damage in case something happens to the building.

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Travel insurance (Reiseversicherung)

If you have a credit card in Germany, you should have a look at the contract because many credit cards do include travel insurance already. In our case, we have a credit card for years but never knew about that until our friend told us. When we checked the details, we found out that if we book our flight ticket/ hotel with that credit card, we are actually insured.

For example, we flew to Hong Kong with our baby 2 years ago. Our baby got sick in Hong Kong and we had to pay for doctors in Hong Kong. After we came back to Germany, we claimed the medical expense back because we bought the Hong Kong flight ticket with our credit card.

I would highly encourage you to have this insurance, especially if you have small kids. There are so many things that can happen out of your control. My friend booked the flight tickets for her whole family to the USA. One day before the flight, her baby got so sick that she had to cancel the flight. And guess what, she got all her money back as she booked the ticket with her credit card. The insurance also covers if something happens to your flight, e.g. delay, luggage lost, etc. You can compare offers from different credit cards here.

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I know that insurance is a complicated topic that people normally do not want to talk about. But it is important. Trust me, once you go through all the paperwork and have everything settled, you will feel so much more relieved in your life.

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Which insurance do you have in Germany? Leave a comment below and let me know!

 

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