Personal liability insurance tax-deductible: Where to record your contributions and save taxes
29 May 2025
3
Minutes
Katrin Straub
CEO at nextsure
Did you know that you can deduct your private liability insurance from your taxes? Many taxpayers are missing out on real savings here. Find out how to correctly include your contributions in your tax return and reduce your tax burden.
The topic in brief and concise terms
Contributions to private liability insurance can be deducted as special expenses in the pension expenses section (lines 46-50, often line 48) up to a maximum of 1,900 euros (employees) or 2,800 euros (self-employed).
In addition to personal liability insurance, other liability insurances (e.g. pet owner's liability, motor vehicle liability) and precautionary expenses (e.g. accident, disability insurance) can also be claimed for tax purposes.
Proof of contributions paid (e.g., contribution certificate, contract copy with bank statements) only needs to be submitted upon request from the tax office (record retention obligation).
Quick Facts: The Essentials of Tax Deductibility for Your Personal Liability Insurance
The contributions to private liability insurance are deductible as special expenses. You enter these in the 'Vorsorgeaufwand' section of your tax return. For employees and pensioners, there is a maximum amount of one thousand nine hundred euros for other pension expenses. Self-employed persons can claim up to two thousand eight hundred euros. These amounts also include other insurance contributions such as health and long-term care insurance premiums.
Practice Section: How to correctly enter your liability insurance
To claim your personal liability insurance on your taxes, you need the "Anlage Vorsorgeaufwand" form. The entry is made in the section "Weitere sonstige Vorsorgeaufwendungen". Specifically, lines 46 to 50 are relevant, often line 48 is explicitly mentioned. If you have multiple liability insurances, such as pet liability insurance, add the annual contributions. For example: Your personal liability insurance costs sixty euros annually, the pet liability insurance eighty euros. You then enter the sum of one hundred and forty euros. You can also find an overview of tax-deductible insurance policies with us. Make sure to only indicate actually paid contributions. The tax office usually accepts the contribution certificate from your insurance. Alternatively, a copy of the insurance policy together with bank statements often suffices as proof of payment.
Here is a list of typical liability insurances you can specify:
Personal liability insurance
Motor vehicle liability insurance (not comprehensive for employees)
Pet owner liability insurance (e.g., for dogs or horses)
Homeowner liability insurance
Building owner liability insurance
Water damage liability insurance
Correct indication ensures you maximum tax savings within the limits. For couples filing a joint tax return, the respective maximum limits are added together. If the maximum limit for an employed partner is one thousand nine hundred euros and for the self-employed partner two thousand eight hundred euros, the joint maximum limit is four thousand seven hundred euros. It is important to understand the purpose of liability insurance to properly assess the tax benefit.
Expert Depth: Understanding Maximum Amounts, Evidence, and Legal Foundations
Contributions to private liability insurance are counted as other preventative expenses according to Paragraph 10, Section 1, Number 3a of the Income Tax Act (EStG). However, the deduction is capped. The maximum amount for other preventative expenses is one thousand nine hundred euros for employees, civil servants, and pensioners. For self-employed individuals who fully cover their health insurance contributions themselves, a higher rate of two thousand eight hundred euros applies. This maximum amount is often already exhausted by contributions to basic health and statutory long-term care insurance. In such cases, declaring private liability does not have a further tax effect. Nevertheless, you should always declare the contributions because the tax office checks if there is still scope available. Find out more about where to enter insurance in the tax return.
Our expert tip: Keep your insurance documents and payment receipts for at least the duration of the objection period after receiving the tax assessment. For several years, there has been a requirement to retain records; this means evidence needs to be submitted only upon explicit request from the tax office. You will usually receive an annual contribution certificate automatically from your insurer. The private liability insurance is an important component of your protection.
Other Deductible Insurances and Special Cases
In addition to private liability insurance, there are other policies whose contributions you can claim as precautionary expenses. These include accident insurance, term life insurance, and disability insurance. Contributions to unemployment insurance are also included here. For certain work-related insurances, such as pure professional liability insurance, it may be possible to deduct them as business expenses (Annex N for employees) or operating expenses (for freelancers). This can be advantageous since different upper limits apply here. Check the possibility of splitting combined contracts (professional and private liability). The insurer can often certify the professional portion. The connection between insurance and tax is a complex topic. Motor vehicle liability insurance is deductible as a precautionary expense, but not comprehensive insurance for employees. Freelancers can also sometimes claim comprehensive insurance as operating expenses if the vehicle is used for business purposes.
The following insurances are typically deductible as precautionary expenses (special expenses), provided the maximum amounts are not exceeded:
Private liability insurance
Pet owner liability insurance
Accident insurance
Term life insurance
Disability insurance (often as a special expense)
Statutory and private basic health and nursing care insurance (primarily considered)
Car liability portion
Unemployment insurance
It is always advisable to check the individual situation, as the tax impact depends on many factors. Knowing how much liability insurance costs helps with budget planning and assessing the tax advantage.
When is it particularly worthwhile to specify personal liability insurance?
Declaring private liability insurance on your tax return is always worthwhile if the maximum amount for other contributory expenses (one thousand nine hundred or two thousand eight hundred euros) has not yet been exhausted by other priority insurances such as basic health and long-term care insurance. In particular, low-income earners, trainees, or pensioners often benefit, as their social security contributions may be lower, allowing more room for deducting additional insurances like private liability. Even if you pay only a small annual premium for your private liability insurance, such as fifty euros, it can be worthwhile to declare it. Every euro recognized reduces your taxable income. Even if the contributions have no impact, there are no disadvantages to declaring them. Although the question of whether children are included in private liability insurance is not directly relevant to taxes, it does affect the necessity and scope of insurance coverage, the contributions of which you can then claim. The deductibility is an additional incentive to ensure sufficient protection.
nextsure: Your partner for comprehensive protection and advice
As a digital insurance portal, it is our mission at nextsure to offer you tailored and easy-to-understand insurance solutions. We understand that the insurance jungle and tax aspects can be complex. That's why we emphasise expert advice and transparent information to ensure that not only are you optimally insured, but you can also take advantage of financial benefits like the deductibility of your personal liability insurance. Our expertise in niche insurance allows us to find the right protection for special needs too. We support you in analysing your insurance situation and uncovering potential for optimisation. An accident can happen quickly, and the question of whether the private liability insurance increases in the event of a claim is just one aspect. More important is to be well insured in the first place.
Request an individual risk analysis now: Have your insurance situation checked free of charge and receive concrete optimisation suggestions.
More useful links
Wikipedia offers a comprehensive overview of personal liability insurance in Germany.
The Federal Ministry of Finance provides an official document on the deduction of precautionary expenses as special expenses.
The Tax Office NRW informs about precautionary expenses as special expenses for private individuals.
The VLH (Vereinigte Lohnsteuerhilfe e.V.) provides information on which insurances can be tax-deductible.
The WirtschaftsWoche (WiWo) examines in an article which insurances can be included in the tax return.
FAQ
In which line of the tax return is the personal liability insurance recorded?
The contributions to private liability insurance belong in the supplementary expenses statement, specifically in lines 46 to 50 under 'Other Miscellaneous Supplementary Expenses'. Line 48 is frequently mentioned explicitly.
What is the maximum limit for the deduction of private liability insurance?
For other precautionary expenses, which include private liability insurance, there is an annual maximum amount of 1,900 euros for employees, civil servants, and pensioners. For self-employed individuals, this amount is 2,800 euros. Please note that contributions to health and long-term care insurance are given priority and may already fully utilize this maximum amount.
Do I need to submit receipts for liability insurance directly with the tax return?
No, for a few years now, there has been a requirement to retain evidence. This means you only need to keep the documents (e.g., premium invoice, bank statements) and present them only upon explicit request from the tax office.
Is it always worth declaring personal liability insurance on your tax return?
Indicating this is worthwhile if the maximum amount for other insurance expenses has not yet been exhausted by other insurances (particularly health and care insurance). Since there are no disadvantages, providing this information is generally recommended.
Are contributions to dog liability insurance also tax-deductible?
Yes, contributions for dog liability insurance, like private liability insurance, can be entered as other precautionary expenses in the 'Vorsorgeaufwand' annex.
What happens if I have multiple liability insurances?
If you have multiple liability insurances (e.g. personal, motor vehicle, pet owner liability), add up the annual premiums of all deductible liability insurances and enter the total in the appropriate line of the Annex Vorsorgeaufwand.
