Make the most of private liability insurance in your tax return: Here's how
21 May 2025
8
Minutes
Katrin Straub
CEO at nextsure
Did you know that you can deduct contributions to private liability insurance from your taxes? Many taxpayers do not fully take advantage of this opportunity, leaving money on the table. Learn here how to correctly declare your insurance contributions and reduce your tax burden.
The topic in brief and concise terms
Contributions to private liability insurance can be tax-deductible as other precautionary expenses up to certain maximum amounts (1,900 euros for employees, 2,800 euros for self-employed individuals).
The entry is made in the appendix 'Vorsorgeaufwand' (lines 46-50); evidence such as contribution invoices should be kept.
The deductibility is often limited by primarily considered health and nursing care insurance contributions; a precise examination of the remaining scope is crucial.
Quick overview: Private liability insurance and tax
The private liability insurance is one of the most important policies and protects you from everyday risks. Fortunately, the contributions are tax-deductible. They are considered as other precautionary expenses and reduce your taxable income. The entry is made in the precautionary expenses section of your income tax return, typically in lines 46 to 50. Note the annual maximum amounts for other precautionary expenses. For employees, this is generally 1,900 euros, for self-employed people 2,800 euros. However, these sums also include other deductible insurances like vehicle liability or accident insurance. A good private liability insurance is therefore not only protection but can also reduce your tax burden. Thorough examination of whether the maximum amount has already been exhausted by health and care insurance contributions is crucial. This establishes a solid basis for accurate reporting in your next tax return.
Practice Guide: Correctly Enter Contributions for Liability Insurance
To claim your private liability insurance contributions for tax purposes, you will need the supplementary form for retirement expenses. The relevant lines are usually 46 to 50, specifically for 'Other miscellaneous retirement expenses'. Here, you should enter the total amount of your contributions paid in the tax year. As proof, the annual contribution certificate from your insurer is usually sufficient. Alternatively, the tax office often also accepts a copy of the insurance contract along with bank statements that verify your payments over the entire year. A common mistake is exceeding the maximum amounts, as the contributions for health and long-term care insurance often account for a large portion of this. Therefore, check in advance how much leeway you have up to the maximum amount of €1,900 (employees) or €2,800 (self-employed). Careful documentation and knowing where to enter insurances are invaluable here. This ensures that your expenses are correctly accounted for and you do not miss out on any potential tax savings.
Important documents and evidence for the tax office:
For listing your private liability insurance in the tax return, you should have the following documents ready, although these usually only need to be submitted at the request of the tax office:
Annual contribution certificate from your insurance company (often sent automatically).
Copy of the insurance contract (policy).
Bank statements that confirm regular contribution payments over the tax year (at least deductions for 12 months).
If applicable, a confirmation of the composition of contributions, if multiple insurances are bundled in one policy.
The completed supplementary form for retirement expenses (lines 46-50 relevant for other retirement expenses).
These documents help to quickly and clearly substantiate your details in the event of queries.
Optimisation: Make full use of maximum amounts and savings potential
The maximum amounts for other precautionary expenses are an important factor in determining the tax deductibility of your private liability insurance. For employees and civil servants, this is €1,900 annually, and for the self-employed, it is €2,800. Married couples assessed jointly can claim double these amounts, i.e., up to €3,800 or €5,600. It is important to know that contributions to basic health and nursing care insurance are given priority consideration and these maximum amounts are often already exhausted. If your contributions to health and nursing care insurance are below the maximum amount, you can top up the difference with contributions to private liability insurance and other policies. A detailed list of all deductible insurances is helpful here. An example: An employee pays €1,600 for their basic health and nursing care insurance. This leaves them with €300 (€1,900 - €1,600) for other precautionary expenses such as private liability insurance. Understanding these relationships is key to maximising your tax savings.
Expert knowledge: Legal foundations and current guidelines
The tax deductibility of precautionary expenses, which include private liability insurance, is governed by § 10 of the Income Tax Act (EStG). [10,§10-] This paragraph defines which expenses are recognised as special expenses and under what conditions. Contributions to private liability insurance are considered "other preventive expenses" according to § 10 para. 1 no. 3a EStG. [10] Court decisions regularly confirm the deductibility as long as the formal requirements and maximum amounts are met. Current rulings often concern detailed issues, such as exact delineation or proof obligations. Our expert tip: Keep all proof of contributions and insurance policies for at least the duration of the appeal period of your tax assessment, but ideally for ten years. The tax office can request documents retroactively up to four years. A correct and complete statement of your insurance in the tax return avoids inquiries and ensures the maximum possible tax savings. Knowledge of the legal basis strengthens your position with the tax office.
Checklist for the deductibility of private liability insurance:
Check using this list whether and how you can deduct your private liability insurance:
Generated taxable income in the relevant year? (Basic requirement)
Private liability insurance taken out and contributions paid?
Do you have the preventive expenses annex? (Entry in lines 46-50)
Annual contribution certificate or contract and payment proofs available?
Has the maximum amount for other preventive expenses (1,900 euros for employees, 2,800 euros for self-employed) not yet been exhausted by health and nursing insurance?
For joint assessment with the spouse, have the double maximum amounts been considered?
Have all deductible liability insurances (e.g., also animal owner's liability) been summed up?
Deadlines for submitting the tax return observed?
These points help you not to overlook important aspects.
Special cases and design tips for your tax return
In addition to the classic private liability insurance, there are other liability insurances that can be deducted as other precautionary expenses. These include, for example, animal owner liability insurance (for dogs or horses) or household and landowner liability. You also enter these contributions in the "Vorsorgeaufwand" section and they will be credited against the shared maximum amount. Our expert tip: If you're unsure which of your insurances are deductible, it's worth taking a look at your insurance documents or inquiring with your insurer; often there are annual certificates for the tax office. Even if your contributions to private liability insurance are relatively low, for example, only 60 euros per year, you should specify them as long as the maximum amount has not been reached. Every euro counts! For families, it is often interesting to know to what extent the children are covered in private liability insurance and whether this affects deductibility (the deductibility of the policy as a whole remains unaffected). A thorough review of all eventualities ensures you get the full tax benefit.
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More useful links
The Vereinigte Lohnsteuerhilfe e.V. (VLH) provides an overview of which insurance policies are tax-deductible.
The portal Gesetze im Internet offers the full text of Section 10 of the Income Tax Act (EStG) regarding special expenses.
The Federal Ministry of Finance provides insights into the administrative regulations on income tax (EStH), particularly Annex 22a.
A document from the German Bundestag discusses tax deduction options.
Wikipedia offers a comprehensive article on private liability insurance in Germany.
The Gesamtverband der Deutschen Versicherungswirtschaft (GDV) provides statistics on business development in general liability insurance.
FAQ
Can I always deduct my personal liability insurance from my taxes?
In principle, yes, provided you have taxable income. However, the deductibility is limited by maximum amounts for pension expenses (€1,900 for employees, €2,800 for self-employed individuals). Often, these are already exhausted by contributions to health and long-term care insurance.
Is it worthwhile to report even small contributions to liability insurance?
Yes, any amount can reduce your tax burden as long as the maximum amount for other pension expenses has not yet been reached. Even if it's only 50 or 100 euros, you should declare them.
What happens if I forget to include liability insurance in the tax return?
If you have not yet missed the deadline for filing an objection to your tax assessment (usually one month after receipt), you can request a correction. Otherwise, the tax saving for this year is lost.
Are other liability insurances (e.g. animal owner liability) also deductible?
Yes, contributions to pet liability insurance (dogs, horses), homeowner liability insurance, or environmental liability insurance can also be claimed as other precautionary expenses within the limits of the maximum amounts.
My partner and I have separate liability insurances. How do we record this?
In the case of joint tax assessment, the maximum amounts are added together (e.g., €3,800 for employees). Each partner enters their own contributions in their pension expense schedule, or you can consolidate them in a joint declaration, depending on the tax software or forms used.
Where can I find the exact line numbers for the supplementary pension expense?
The line numbers may change slightly from year to year. For private liability insurance, they are typically lines 46-50 in the form for 'Other miscellaneous provisions for retirement benefits' in the section on pension expenses. Check the current instructions for your tax return or use tax software.
