Private liability insurance in your tax return: how to make the most of it
21/05/25
7
Minutes
Katrin Straub
Managing Director at nextsure
Did you know that you can deduct premiums for private liability insurance from your taxes? Many taxpayers do not make full use of this opportunity and leave money on the table. Find out here how to declare your insurance premiums correctly and reduce your tax burden.
The topic in brief and concise terms
Premiums for private liability insurance are tax-deductible as other provision expenses up to certain maximum amounts (€1,900 for employees, €2,800 for self-employed people).
The entry is made in the Annex Vorsorgeaufwand (lines 46-50); supporting documents such as contribution invoices should be kept.
Tax deductibility is often limited by health and care insurance contributions that are taken into account first; a precise assessment of the remaining scope is crucial.
Quick overview: private liability insurance and tax
Private liability insurance is one of the most important policies there is and protects you against everyday risks. Fortunately, the premiums are tax-deductible. They count as other retirement provision expenses and reduce your taxable income. The entry is made in the retirement provision section of your income tax return, typically in lines 46 to 50. Please note the annual maximum amounts for other retirement provision expenses. For employees, this is usually 1,900 euros; for self-employed people, 2,800 euros. However, these sums also include other deductible insurance policies such as motor vehicle liability insurance or accident insurance. A good private liability insurance policy is therefore not only protection, but can also reduce your tax burden. Careful checking of whether the maximum amount has already been used up by health and long-term care insurance contributions is crucial. This gives you a solid basis for making the correct declaration in your next tax return.
Practical guide: correctly enter liability insurance premiums
To claim your contributions to private liability insurance for tax purposes, you need the Vorsorgeaufwand annex. The relevant lines are usually 46 to 50, specifically for “Other miscellaneous pension expenses”. Here you enter the total amount of your contributions paid in the tax year. As evidence, the annual contribution certificate from your insurer is usually sufficient. Alternatively, the tax office often also accepts a copy of the insurance contract together with bank statements proving your payments over the entire year. A common mistake is exceeding the maximum amounts, as contributions to health and long-term care insurance often already take up a large part of this allowance. Therefore, check in advance how much headroom you still have up to the maximum amount of EUR 1,900 (employees) or EUR 2,800 (self-employed). Careful documentation and knowing where insurance policies are entered are worth their weight in gold here. This ensures that your expenses are taken into account correctly and that you do not give away any potential tax savings.
Important documents and supporting evidence for the tax office:
For declaring your private liability insurance in your tax return, you should have the following documents ready, even though these usually only need to be submitted on request by the tax office:
Annual contribution certificate from your insurance company (often sent automatically).
Copy of the insurance contract (policy).
Bank statements proving the regular premium payments over the tax year (at least the debits for 12 months).
If applicable, confirmation of how the contributions are broken down if several insurance policies are bundled into one policy.
The completed Vorsorgeaufwand annex (relevant are lines 46-50 for other miscellaneous pension expenses).
These documents help you substantiate your information quickly and clearly if the tax office has any questions.
Optimisation: Fully utilising maximum amounts and savings potential
The maximum amounts for other pension-related expenses are an important factor in the tax deductibility of your private liability insurance. For employees and civil servants, this amounts to EUR 1,900 per year, and for the self-employed to EUR 2,800. Married couples assessed jointly can claim double the amounts, i.e. up to EUR 3,800 or EUR 5,600. It is important to know that contributions to basic health and long-term care insurance are taken into account first and often already use up these maximum amounts. If your contributions for health and long-term care insurance are below the maximum amount, you can make up the difference with contributions to private liability insurance and other policies. A detailed list of all deductible insurance policies helps here. An example: An employee pays EUR 1,600 for their basic health and long-term care insurance. This leaves them with another EUR 300 (EUR 1,900 - EUR 1,600) for other pension-related expenses such as private liability insurance. Understanding these connections is the key to maximising your tax savings.
Expert Knowledge: Legal Basics and Current Information
The tax deductibility of precautionary expenses, which also include private liability insurance, is regulated in Section 10 of the Income Tax Act (EStG). [10,§10-] This section defines which expenses are recognised as special expenses and under what conditions. Contributions to private liability insurance fall under the category of “other precautionary expenses” pursuant to Section 10(1) No. 3a EStG. [10] Court rulings regularly confirm deductibility, provided the formal requirements and maximum limits are observed. Current judgments often concern detail questions, such as the exact classification or obligations to provide evidence. Our expert tip: Keep all proof of contributions and insurance policies for at least the duration of the objection period for your tax assessment, but ideally for ten years. The tax office can request supporting documents retrospectively for up to four years. Correct and complete declaration of your insurance on your tax return avoids follow-up questions and secures you the maximum possible tax savings. A precise understanding of the legal basis strengthens your position vis-à-vis the tax office.
Checklist for the deductibility of private liability insurance:
Use this list to check whether and how you can claim your private liability insurance as a tax deduction:
Taxable income earned in the relevant year? (basic requirement)
Private liability insurance taken out and premiums paid?
Schedule for precautionary expenses to hand? (entry in lines 46-50)
Annual premium certificate or policy and payment records available?
Maximum amount for other precautionary expenses (EUR 1,900 for employees, EUR 2,800 for self-employed persons) not yet exhausted by health and long-term care insurance?
In the case of joint assessment with your spouse, double the maximum amounts taken into account?
All deductible liability insurances (e.g. also animal owner’s liability insurance) totalled?
Deadlines for submitting the tax return observed?
These points help you ensure that you do not overlook any important aspects.
Special cases and planning tips for your tax return
Besides the standard private personal 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 home and property owner liability insurance. You should also enter these contributions in the precautionary expenses section, and they are counted towards the joint maximum amount. Our expert tip: If you are unsure which of your insurance policies are tax-deductible, it is worth taking a look at your insurance documents or asking your insurer; there are often annual certificates for the tax office. Even if your contributions to private liability insurance are relatively small, for example only 60 euros per year, you should declare them, provided the maximum amount has not yet been reached. Every euro counts! For families, it is often useful to know the extent to which children are covered under private liability insurance and whether this has any effect on deductibility (the policy remains deductible as a whole). A thorough review of all eventualities secures you the full tax advantage.
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More useful links
The Vereinigte Lohnsteuerhilfe e.V. (VLH) provides an overview of which insurance policies are tax-deductible.
The Gesetze im Internet portal provides the full text of Section 10 of the Income Tax Act (EStG) on special expenses.
The Federal Ministry of Finance offers insights into the administrative regulations on income tax (EStH), in particular Appendix 22a.
A document from the German Bundestag deals with tax deduction options.
Wikipedia offers a comprehensive article on private liability insurance in Germany.
The German Insurance Association (GDV) provides statistics on business development in general liability insurance.
FAQ
Can I always deduct my private liability insurance from my taxes?
Basically yes, provided you have taxable income. However, deductibility is limited by maximum amounts for retirement provision expenses (€1,900 for employees, €2,800 for self-employed people). Often, these are already fully used up by contributions to health and long-term care insurance.
Is it worth declaring even small contributions to liability insurance?
Yes, any amount can reduce your tax burden, as long as the maximum amount for other provision expenses has not yet been reached. Even if it is only 50 or 100 euros, you should declare them.
What happens if I forget to declare liability insurance on my tax return?
If you have not yet missed the deadline for lodging an objection to your tax assessment (usually one month after receipt), you can request a correction. Otherwise, the tax savings for this year are lost.
Are other liability insurance policies (e.g. pet owner liability insurance) also tax-deductible?
Yes, contributions to animal owner liability insurance (dog, horse), homeowners’ and property owners’ liability insurance, or water pollution liability insurance can also be claimed as other precautionary expenses within the maximum limits.
My partner and I have separate liability insurance policies. How do we enter this?
For joint tax assessment, the maximum amounts are added together (e.g. EUR 3,800 for employees). Each partner enters their own contributions in their own Annex Vorsorgeaufwand, or you summarise them in a joint declaration, depending on the tax software or forms used.
Where can I find the exact line numbers for the Anlage Vorsorgeaufwand?
The line numbers can change slightly from year to year. For private personal liability insurance, they are typically lines 46-50 in the Vorsorgeaufwand schedule for “Other miscellaneous precautionary expenses”. Check the current instructions for your tax return or use tax software.
