Munich in English - selected by independent Locals for Cosmopolitans, Newcomers and Residents - since 1989

back to overview

June 1999

The best policy: to insure or not insure

A look at the policies for German insurences.

On average, germans hold six private insurance policies, for which they pay some DM 2,840 a year. But not all policies are equally important. What you need will depend on your age, income and family circumstances. However, there are some general principles. Certain insurances cannot be avoided. If you are employed, you are automatically in the state accident insurance system (Unfallversicherung) which covers accidents at or on the way to work. You will also pay into the state pension insurance scheme (Rentenversicherung), which, as well as old-age pensions, provides benefits if you become incapable of work for medical reasons. Employees who earn up to DM 6,375 a month must join the state health insurance (gesetzliche Krankenversicherung) and nursing-care insurance (Pflegeversicherung) schemes; those who earn more have the option of taking out private insurance instead. People in the state health scheme can also take out extra (Zusatz) private health insurance to obtain better coverage, e.g. for a wider range of dental treatments. Of the other private insurances, the truly essential, although not legally compulsory, one is personal liability insurance (Haftpflichtversicherung). This covers damage you cause to other people or their property. Damage caused by your partner, children and cats is also covered. Dogs and horses require their own policies, as do people with home oil tanks and private businesses. A personal liability insurance is mandatory if you have a car. Moreover, you can insure your car against fire and theft (Teilkasko) or comprehensively (Vollkasko). Both policies also cover any damage you cause. The latter is generally sensible only for late model cars. An essential private policy for younger people is incapacity insurance (Berufsunfähigkeitsversicherung). This pays a monthly pension if you are physically unable to work — regardless of the cause — and is an essential addition to the state benefits. Less crucial, but still popular, is private accident insurance (private Unfallversicherung), which pays lump-sum benefits according to the degree of injury suffered in any accident. Household insurance (Hausratversicherung) provides important coverage for your belongings should they be damaged through fire, explosions, break-ins, theft, burst pipes, etc. A policy with a value of DM 1,200 per square meter of your home is often recommended. Home owners need a separate policy to cover the property itself (Wohngebäudeversicherung). If you have dependants, you may want life insurance (Lebensversicherung). The cheapest is a Risikolebensversicherung, which pays out in the event of your death, not if you survive the insurance period. A Kapitallebensversicherung, on the other hand, includes a large savings element — paid out if you survive the insurance period — and is far more expensive. Most experts suggest taking out a Risiko policy and investing your savings elsewhere. Travel insurance (Reiseversicherung) is also not really essential, unless you’ve planned a very costly holiday that could be cancelled. What is vitally important, however, is private travel health insurance (Reisekrankenversicherung), which can be bought separately at little expense. For more information, contact: Bund der Versicherten, tel. (04193) 99040,

tell a friend