10 things to keep in mind when getting private liability

Private liability is the most common insurance in Germany. But how can you tell if the coverage is any good? Find out here.
Thilo
30.1.2020

1. Amount of coverage

The sum insured amount determines the maximum amount your personal liability insurance covers. These sums are usually between 5 million and 60 million euros. Recommended is a coverage of at least ten million euros - Coya offers protection up to 30 million euros. If a loss really does amount to millions of euros (however improbable it may be), it is better to be insured a little too high than too low. For example, if a loss is 11 million euros and you have insurance cover of up to 10 million euros, you would have to pay off the remaining 1 million euros for the rest of your life - and very few are lucky enough to have won the lottery to help with that last million.

However, it should also be said that what applies in one direction also applies in the other: You can also overdo it with the amount of cover. Some insurers repeatedly outdo each other with the sums insured and promise protection of up to 75 million euros or even 100 million euros - there has never been a loss of this magnitude in private liability before, and the probability that there will ever be one is very low. After all, more is not automatically better.

In the end, of course, everyone should decide for themselves what level of cover is appropriate for their situation.

2. Is the loss of keys also insured?

We do not need to explain to anyone how annoying it is to lose a key to a rented flat or the office. To all the annoyance of losing a key is the added costs involved: sometimes only a key has to be copied, in other cases the lock has to be replaced or even a whole locking system in the building. This can be really expensive. In order to avoid having to bear the costs yourself - because the person who caused the damage has to pay the costs - you could use a good private liability insurance. This insurance usually covers the costs that can arise from the loss of a key - with the restriction that it must be a key to someone else's property. Unlike tenants and employees, homeowners cannot claim the loss of a key to their home from their liability insurance.
The following applies: The loss of keys handed over to you (e.g. to a rented flat, the office, the clubhouse or the flat of friends who are on holiday) and consequential costs such as the replacement of the locking system are covered by private liability up to a certain amount. Some insurers reimburse the damage up to the full insured amount (e.g. Coya up to 30 million euros), others set a smaller sum-limit to the whole, e.g. up to 10,000 euros. If the locking system in the office building has to be replaced, this can quickly become several times more expensive. When getting a private liability insurance policy, make sure that the costs covered by your insurance are high enough for your needs in the event of key loss.


3. Cover for damage to rented property & damage to borrowed items

A good private liability insurance policy also covers damage to borrowed items ("I borrowed your PlayStation last week - unfortunately, it is broken now, I played too hard ..."). So if you accidentally damage anything you borrowed or rented from friends or companies (everyone borrows things at some point), you can report it to your liability insurance company. Of course, the following also applies here: Deliberately caused damage is not covered by private liability insurance.

By the way: damage to rented property is also covered by private liability insurance. More and more landlords therefore require private liability insurance for a tenancy. If, for example, a heavy object falls out of your hand and leaves a mark on the parquet floor or you accidentally damage the washbasin in the bathroom, you can report this damage to your insurance company. However, normal wear and tear is not covered.

4. Courtesy (Gratuitous) damages

You help a friend move and a box of dishes or the 4K TV slips out of your hand in the stairwell. Ouch! Your friend forgives you, after all this can happen and you didn't do it on purpose (at least we hope not), but he is not happy, of course. According to case law, your friend is not entitled to compensation, because helping your friend carrying stuff is a favour, but as a friend you don't want to let him sit on the expenses.

For exactly such cases, many German private liability insurers offer cover for damage caused by favours: If you wish, your liability insurance will pay for the damage, and this mishap won't stand in the way of your friendship forever.

When getting insurance, check whether and to what extent such courtesy damages are covered and pay attention to the tariff - because this service is not covered in every tariff. With Coya you can add such damages via an add-on.

5. Private liability - for you alone and also for your family?

Before signing a contract for private liability insurance, you should think about who should be covered by the contract: Just you? Or also your partner and maybe even the children?

If you want to get the insurance for yourself, choose the so-called "single tariff" (also: individual insurance). Don't worry, of course you can also take this out if you are not single. The term "single" here does not refer to your relationship status, but stands for an "individual" contract - so there is only one person insured by it: the policyholder.

If you want to insure more than just yourself, for example, your partner (also applies to non-married couples) and/or child (single parents can also insure only their children), you should make sure that a family tariff can be chosen. All family members are then insured if they meet the contract requirements (e.g. also grandmother and grandfather). 


6. Are children covered?

In Germany, children up to the age of seven (in road traffic under ten years of age) are considered to be unfit to commit torts (§ 828 BGB). This means: If a child of the appropriate age causes damage - for example when playing in the garden with the ball - he or she cannot be held responsible for the resulting costs, and parents are not obliged to compensate for the damage either, provided they have not violated their duty of supervision. This in turn means that the parents' private liability insurance does not have to pay for it either.

Such damages often happen to friends or neighbours (example: the child broke a hole in the neighbour's window pane while playing ball) - and they rarely want to be left to pay the costs. For just such cases, liability insurances often offer the possibility to cover the damage via the clause of children/persons who are incapable of tort, if this is desired by the policyholder.

By the way, this also applies to people who have outgrown childhood, for example people suffering from dementia or mentally impeded people. The following also applies to them: If they cause damage, they are not obliged to pay compensation; however, by means of the corresponding clause in the private liability insurance, damage caused by them can be covered if desired. With Coya, children and persons who are incapable of tort can be co-insured via an add-on.

7. Bad debt cover

Private liability insurance is always about damage that you have unintentionally caused to others. But what happens if someone has caused you damage and cannot pay for it because they have no private liability insurance and can prove that they have no private financial means to compensate for the damage? In such a case, a bad debt coverage in your private liability insurance contract may be of benefit/ Through this cover, your insurance may pay for the damage you have suffered. In insurance terms, this means: With the bad debt loss cover, the benefits of your personal liability insurance are applied to you in a mirror image - the person causing the damage would be insured for this one claim with your contract, so to speak, so that the damage is covered by the insurance. By the way, in our private liability insurance this even applies to damages that someone has caused you intentionally.

8. Amount of the deductible

With some private liability insurances, a certain amount must be paid by the policyholder in the event of a claim - this is known as a deductible or excess. Depending on the insurance, this can be between 150 and 500 euros. This means that you have to pay for damages whose costs lie within this excess yourself; the insurance only covers costs above this amount. Sometimes these deductibles are hidden - in principle there is no deductible, but the contract contains exceptions, for example in the case of bad debt cover, where they can be up to 3,000 euros. In the Coya private liability insurance there are no deductibles (also no hidden ones), so you do not have to pay a share yourself in case of damage.


9. "Majorca cover", "Motor Vehicle deductible" & Co.

No, unfortunately no private liability insurance will cover your Mallorca holiday . With the so-called "Mallorca-Deckung" (has got its nickname from the many German tourists on the Balearic Island who rent cars there) you are protected against high costs for car rental damages in other EU countries (of course not only on Mallorca), which exceed the car liability insurance cover valid in the respective holiday country. It is usually part of the car insurance, but it also appears in the private liability insurance.

Sounds complicated, but it is all the more important: If you cause a traffic accident with several injured persons while on holiday with a rental car and the damage exceeds the sum insured under the liability insurance of the rental car provider, your private liability insurance will cover the portion not covered by the insurance of the rental car provider.

A further coverage by the private liability insurance, which refers to rented or borrowed vehicles: If you rent a car or use car-sharing offers, you will usually be confronted with deductibles in the event of damage (usually these are between 200 and 500 euros). Some Private liability insurers, such as Coya (included in the rented vehicles add-on), will cover these deductibles for you in case of damage. The same applies to misfuelling rented vehicles: If you accidentally fill up with the wrong fuel, your private liability insurance may cover the resulting damage.

10. Period of notice

Last, but not least: there are still plenty of inflexible contracts with long notice periods of three or even twelve months, even in the insurance world. Although the majority of providers still offer gag contracts, from which it is difficult to get out, there are also more and more insurers who offer their customers modern contracts without long notice periods. At Coya, for example, you have the right to cancel your private liability insurance daily and without giving reasons to the following day.

Conclusion:

As with any insurance policy, there are a few important points to consider. It is important that the insurance fits your needs and covers the risks important to your life. Should you have any questions about individual points, please feel free to contact us at any time.

If you want, you can calculate an offer directly here.


Btw: Do you already know our guide for expats in Germany? Click here to check out the Expats in Germany blog for all the help and guidance we give to expats, for example: "6 reasons you need liability insurance as an expat" or "5 reasons why expats don't get liability insurance".

Pictures: Unsplash / Canva
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