Private Liability
“You break it, you pay it”
Even though private liability insurance is not mandatory, it still remains among the most essential type of insurance to have. When are you liable toward others? Personal liability occurs in the event of an accident, that results in bodily injury, property damage or wealth damages towards a third party. Personal liability claims could include medical bills, legal fees and more. If you have personal liability coverage, you may avoid paying for such incidences from your own pockets, even if costs add up to millions. Why is it so important in Germany to be covered by such insurance? While in other countries the compensation of personal property or wealth damages can be capped depending to the personal income, according to §823 of the German Civil Code, a guilty party is liable with current and future income and wealth with no limitations in the compensation. The vast majority of polices on the market do not cover such costs or cover just partial loss of for instance a private/work key, damages to rented or leased objects, damages in acts of courtesy and much more.
Example: Mr. Expat loses the key of the apartment he is renting. In the rental building there are also several medical practices. The whole central lock system must be changed. The landlord demands the costs for it. Amount of the damage: 10.000 Euros
Example: Mr. Expat damages the parquet floor of the rented apartment with his desk chair. The landlord demands the cost for sanding and sealing the floor. Amount of the damage: 2.400 Euros
Income Protection
Labour disability pension
This insurance is smartly strategic so that it could maintain ones‘ standard personal life, replacing lost income for daily living costs, covering debts or assisting with ongoing medical and rehabilitation costs. The German welfare system sets very stringent criteria in order to receive the public disability rights. Who, and under which conditions can one receive public disability? This depends on certain health grounds;
- cannot work at least six hours (partial disability, 14,5% of the previous gross income); or
- cannot work at least three hours (full disability, max 29% of the previous gross income) per day in full employment over the entire labour market, independently from qualifications.
In order to receive this pension, you must prove that you:
- have made contributions for at least 60 months (qualifying period), that is, have paid into the pension scheme for 5 years, and
- have paid three years of compulsory insurance contributions in the five years since the beginning of the reduced earning capacity.
Particular restrictions exist also for members of professional provision schemes known as berufsständische Versorgungswerke and these include doctors, architects und lawyers. For them a disability pension is only possible when they are absolutely unable to work. An additional condition required, in order to receive the disability pension from the professional provision schemes, is the removal of the medical license or the admission to practice law.
The tight restrictions and low pensions granted by the welfare system do not permit you to maintain an adequate standard of life in the worst case. With a private labour disability pension, you would have much more benefits in the event of a serious illness or injury which leaves you unable to work for a period of at least 6 months or if the latter leaves you with the high probability to be unable to work again in the occupation for which you specialized in (based on your work experience, your education and any training you have had). Since 2005, it is even possible, in certain situations, to deduct the costs for such policies. What is the right scope or what are the best benefit is where we come in. This insurance is almost a “must have” if you wish to maintain your own standard of life in Germany and we are here to help you achieve this!
Example: A 38 years old general practitioner was diagnosed with amyotrophic lateral sclerosis (ALS nerve disease) a few years ago. The disease progressed in the last year, leaving him unable to work any longer in hospital or on-call duties due to his physical limitations and psychological stress. His employment was terminated. The benefits for the occupational disability were recognized. Monthly private disability pension 2,977 Euros until the age of 67.
Legal Expense Insurance
This is a means of financing unpredictable legal costs. Policies cover unforeseeable legal events, securing your compensation for the loss, damage or injury suffered by settlement out of court or through civil or criminal proceedings. The legal expense insurance takes over the costs for defending or representing you in civil, administrative or other proceedings or in respect to any claim made against you. Policies can be chosen on an individual or add-on basis. What kind of legal expenses are covered? Statutory fees of the lawyer of your own choice, fees for the accuser’s lawyer if the case is lost at trial, court fees, witness expenses and even professional personnel fees. Such an insurance can be essential in certain everyday life situation, such as for claiming damages or in the case of employment, housing and property or tax disputes in court.
Example: Mr. Expat rents an apartment in the city centre. After seven years, the landlord decides to increase the rent by three euros per square meter. He justifies this by saying that the price for similar apartments in the city is now higher. Mr. Expat does some research himself on the rental prices and discovers that the case is the other way round: similar apartments in the city are actually cheaper. Since the landlord does not give in, he goes to court. An expert’s report is needed in order to determine the customary rent in the area.
Example: Mr. Expat´s employer demands that he works a ridiculous amount of overtime. The employer then refuses to pay for the extra hours worked. The legal expense insurance service recommends Mr. Expat a specialist lawyer for labor law, and has to take over the cost for this professional help.
Car Insurance
This type of insurance is the only mandatory insurance in Germany (besides social insurance). This insurance can be chosen on an individual basis (liability toward third parties only) or add-on basis (comprehensive cover or half comprehensive cover). The fully comprehensive insurance covers costs to repair any damage made to your car or, in the case of a total loss, the replacement value so that you can buy yourself a new car, similar to the previous one. As fiduciary agents, we can help you choose the option that best fits you and your vehicle.
Contents insurance
This is designed to help you cover the cost of any loss or damage of your belongings at your home such as furniture, rugs and also clothes, shoes and handbags. Contents insurance also covers the cost of any repairs necessary or replacement of goods when loss or damage is caused by fire, theft, or weather-related damages (including storms, earthquakes and more). Content insurance is a useful solution especially if you own expensive household goods.
Example: A burst water pipe floods Mr. Expat´s kitchen. Damaged furniture and appliances, as well as food and other household supplies are replaced using the content insurance.
Example: Mr. Expat´s television catches fire, which spreads to the entire living room. The content insurance replaces the destroyed living room furniture, as well as books, clothes and other items that were damaged in the fire.
Home insurance
This is designed to cover any costs from loss or damage to your home such as fire and smoke, wind, vandalism, hail, explosions, fallen objects, damage caused by the weight of snow, sleet or ice. As a homeowner, extensive damages to your property could be an existential threat to your wealth. With this home insurance policy, you will receive indemnity, taking back any losses or damages you may have experienced.
Example: A burst water pipe floods the Mr. Expats‘ bathroom. The water penetrates through the ground into the floor below. The soaked ceiling needs to be dried and the floor replaced. Homeowners insurance will cover the costs for the damage caused.
Example: A storm destroys a part of the roof of Miss Expat’s house. The home insurance covers the costs of covering the damaged roof area and rain gutter repairs.
