Compulsory insurance in Germany: Which types of cover are really a must?
14.05.25
11
Minutes
Katrin Straub
Managing Director at nextsure
Did you know that in Germany certain types of insurance are legally required, and failing to have them can result in significant penalties? Many people are unsure which policies actually count as compulsory insurance. This article explains which insurance policies you absolutely need and how you can protect yourself against financial risks.
The topic in brief and concise terms
In Germany, health insurance, long-term care insurance and motor vehicle liability insurance are mandatory for most citizens.
For certain professional groups (e.g. doctors, lawyers), professional indemnity insurance is required by law; for dog owners, public liability insurance is often required.
The absence of compulsory insurance can lead to substantial fines, legal consequences and, in the event of a claim, personal liability for your entire assets.
Understanding compulsory insurance: Definition and necessity for each individual
Compulsory insurance is insurance whose conclusion is mandatory under law. This obligation can arise from various laws, such as the Insurance Contract Act (§ 113 VVG). The main reason for introducing compulsory insurance is protection against significant financial risks that can affect not only individuals, but also third parties. Without this cover, claims could quickly lead to an unbearable financial burden for the person causing the damage or the injured party. For example, motor third-party liability insurance ensures that accident victims are compensated even if the person causing the accident does not have sufficient funds. Compliance with the insurance obligation is therefore an important pillar of social solidarity and risk provision. It is important to know what happens if you are not insured. This cover protects against fundamental life risks and ensures a minimum level of security for all citizens. The exact provisions and scope can vary depending on the insurance, but the aim always remains the same: protection against incalculable financial consequences.
Health first: Mastering compulsory health and long-term care insurance
In Germany, every citizen is required to have health insurance. This regulation ensures that everyone has access to medical care. A distinction is made between statutory health insurance (GKV) and private health insurance (PKV). Employees are generally compulsorily insured in the GKV up to a certain income threshold, the annual earnings limit (EUR 73,800 in 2025). Those who earn above this limit, as well as self-employed people and civil servants, can take out private insurance. Choosing the right system depends on many individual factors and should be carefully considered. Closely linked to health insurance is long-term care insurance. Anyone who is insured under statutory health insurance is automatically covered by the social long-term care insurance scheme as well. Privately insured individuals must take out separate private compulsory long-term care insurance. This covers the financial risk in the event of needing care, an issue that is becoming increasingly relevant in view of demographic change. It is advisable to address the question early on of is long-term care insurance mandatory and how your own cover can be structured in the best possible way. Contributions to statutory health insurance are based on income, whereas in private health insurance they depend on age and state of health.
Safely on the road: optimising essential motor third-party liability insurance
For every owner of a motor vehicle in Germany, motor third-party liability insurance is required by law. Without this proof, no vehicle is granted registration for use on public roads. This insurance covers personal injury, property damage and financial loss caused to others by your vehicle. The statutory minimum cover, for example, is 7.5 million euros for personal injury, but experts recommend significantly higher sums, ideally 100 million euros as blanket cover for personal injury, property damage and financial loss, as claims can quickly run into the millions. An adequate level of cover often costs only slightly more, but in the event of a claim offers significantly better protection. Damage to your own vehicle is not covered by third-party liability; for this, voluntary partial or comprehensive cover is necessary. Premiums for motor third-party liability insurance can be claimed for tax purposes as special expenses. Anyone driving without valid motor third-party liability insurance is committing a criminal offence, which can be punished with fines or even imprisonment. Find out more about the details of which insurance you need to be comprehensively protected.
Protecting against professional risks: When professional indemnity insurance becomes mandatory
For certain professional groups, taking out professional indemnity insurance is required by law or by the relevant professional chamber. These include, for example, doctors, lawyers, notaries, tax advisers, architects and engineers. This insurance protects freelancers and self-employed professionals against the financial consequences of personal injury, property damage and pure financial loss they cause to third parties in the course of their professional activities. Without such a policy, these professions often cannot be practised at all. Professional indemnity insurance covers justified claims for damages and defends against unjustified claims, which is also known as passive legal protection. For many other self-employed professionals and businesses, professional indemnity insurance is not mandatory, but it is still highly recommended to protect against potentially ruinous claims. A related form of cover is public liability insurance, which is compulsory for a few sectors such as airport operators or waste disposal companies and covers personal injury and property damage caused by the business or its employees. It is important to assess your own needs carefully and to find out about the specific requirements of your own sector, for example whether accident insurance is compulsory.
Protect animal companions responsibly: Understanding pet owner liability insurance
The obligation to take out pet owner liability insurance, especially for dogs, is not regulated uniformly across Germany, but is a matter for the individual federal states. In six federal states – Berlin, Hamburg, Lower Saxony, Saxony-Anhalt, Schleswig-Holstein and Thuringia – dog liability insurance is mandatory for all dog owners. In other federal states, the requirement applies only to certain dog breeds classified as dangerous or to dogs above a certain size or a certain weight (e.g. in NRW from 20 kilograms or 40 centimetres shoulder height). This insurance is important, as the animal owner is liable without limit for damage caused by their animal – regardless of any personal fault. Private liability insurance usually does not cover damage caused by dogs. Dog liability insurance often costs only around 50 euros a year, but can protect against claims for damages running into the millions. The insured sum should be at least five million euros. If required dog liability insurance is missing, fines of up to 10,000 euros may be imposed. For horses, horse liability insurance is not legally required, but is strongly recommended due to the high potential for damage. Small pets such as cats or rabbits are usually covered by private liability insurance. Find out, a dog must be insured in your federal state.
Berlin: Mandatory for all dogs
Hamburg: Mandatory for all dogs
Lower Saxony: Mandatory for all dogs
Saxony-Anhalt: Mandatory for all dogs
Schleswig-Holstein: Mandatory for all dogs
Thuringia: Mandatory for all dogs
Other federal states: Partial requirement for certain breeds/sizes
These regulations underline the responsibility that comes with keeping animals.
Other important compulsory insurance and social insurance at a glance
In addition to those already mentioned, there are further insurance policies that are compulsory for certain groups of people or activities. Public liability hunting insurance is a must for every hunter in Germany in order to obtain a hunting licence, as handling weapons and carrying out hunting activities involve specific risks. A drone liability insurance policy is also required for operators of drones, both private and commercial. Social insurance is also of central importance for employees. In addition to the health and long-term care insurance already mentioned, this includes statutory pension insurance, unemployment insurance and statutory accident insurance. The contributions for these are generally deducted directly from salary. Statutory pension insurance is compulsory for most employees and also for certain self-employed people (e.g. craftsmen, midwives) and forms the basis of retirement provision. Statutory accident insurance covers accidents at work and on the way to and from work as well as occupational diseases and is borne by the employer. For farmers, there are special regulations, such as compulsory insurance in agriculture. This diversity of compulsory insurance shows how the state attempts to cover fundamental risks for various areas of life and occupational groups.
Here is a brief overview of social insurance for employees:
Statutory health insurance
Long-term care insurance
Statutory pension insurance
Unemployment insurance
Statutory accident insurance
These insurance policies form a social safety net for employees in Germany.
The obligation to take out certain insurance policies is firmly anchored in the German legal system, for example in the Insurance Contract Act (VVG) or in special laws such as the Compulsory Insurance Act for vehicle owners. These laws define not only who is required to have insurance, but often also minimum sums insured and the scope of benefits. The health insurance is a fundamental component of this system. The absence of mandatory insurance can have significant consequences. In the case of motor third-party liability insurance, this can range from fines to penalty points in Flensburg and even custodial sentences; moreover, it is not possible to register a vehicle without insurance cover. Anyone practising as a doctor without professional indemnity insurance, for example, risks having their licence to practise withdrawn. In the absence of health insurance, high back payments for contributions and late payment surcharges may be incurred. In the event of a claim, without insurance cover you are liable with your entire private assets, which can quickly lead to financial ruin. Our expert tip: check your insurance needs and the up-to-dateness of your policies regularly, at least once a year or when major life changes occur (e.g. changing jobs, marriage, the birth of a child, buying a house). Professional advice, such as that offered by nextsure, can help identify gaps and ensure optimal protection.
Useful additions: Which insurance policies are important beyond the mandatory ones
Alongside the compulsory insurances required by law, there are a number of other forms of cover that are not mandatory but are highly recommended for comprehensive protection. At the top of the list is often private liability insurance. It steps in if you accidentally cause harm to someone else – whether personal injury, property damage or resulting financial loss – and protects you against claims that can quickly run into six- or seven-figure sums. Many experts consider private liability insurance to be one of the most important voluntary forms of cover there is. Disability income insurance (BU) can also be vitally important. It protects your income if you are no longer able to work in your occupation for health reasons; statistically, around one in four employees becomes unable to work at some point during their working life. For property owners, buildings insurance is essential to protect their home against damage caused by fire, storm, hail or escape of water. Contents insurance, which protects movable household belongings, is also worthwhile for most households. Depending on your individual circumstances and risk appetite, other types of insurance, such as term life insurance to protect the family or personal accident insurance, may also make sense. A careful analysis of your personal situation helps you decide, whether you need liability insurance or which other policies would optimise your cover.
Your next step towards comprehensive security
The landscape of compulsory insurance in Germany is complex, but essential for everyone’s financial security. From health insurance and motor third-party liability insurance to occupation- or activity-specific policies, the legislator has created a framework designed to protect against the greatest financial risks. It is crucial to know your own obligations and to comply with them in order to avoid significant penalties and, in the worst case, financial ruin. In addition, there are important voluntary insurance policies that can complement individual protection. Regularly reviewing and adjusting your own insurance cover to your current life situation is therefore essential. Make use of the opportunity to find out more and get advice. Request an individual risk analysis now: Have your insurance situation checked free of charge and receive concrete suggestions for optimisation.
More useful links
Wikipedia offers a comprehensive overview of compulsory insurance in Germany.
Federal Ministry of Health provides information on statutory health insurance (GKV).
Federal Ministry of Health offers detailed information on long-term care insurance.
German Pension Insurance explains compulsory and voluntary insurance for employees and self-employed people.
Federal Ministry of Labour and Social Affairs provides information on unemployment benefit.
Federal Agency for Civic Education highlights the German social security system.
Federal Statistical Office (Destatis) provides statistical data on care in Germany.
Federal Ministry of Labour and Social Affairs provides information on the Social Report and the Social Budget.
FAQ
Which compulsory insurance policies are there in Germany, specifically?
The most important mandatory insurance policies include: health insurance, long-term care insurance, motor vehicle third-party liability insurance (for vehicle owners), various professional liability insurance policies (for certain professions such as doctors and lawyers), animal owner liability insurance (required regionally and for certain animals, especially dogs), hunting liability insurance (for hunters), as well as statutory pension, unemployment and accident insurance for employees.
Do I need to arrange all compulsory insurance myself?
Not for all of them. Contributions to social insurance (health, long-term care, pension, unemployment and accident insurance) are usually deducted automatically by the employer for employees. However, you must actively arrange motor vehicle liability insurance, or if applicable professional liability or pet owner’s liability insurance, yourself.
How high are the penalties if I don’t have compulsory insurance?
Penalties vary. If you do not have motor vehicle liability insurance, you may face fines, penalty points and even custodial sentences. For dog liability insurance, fines of up to 10,000 euros are possible. In general: in the event of a claim, without insurance cover you are liable with your private assets.
Are there any exceptions to compulsory insurance?
Yes, in certain cases there are exceptions or special regulations. For example, employees earning above the annual earnings threshold can be exempted from statutory health insurance and switch to private health insurance. Part-time employees earning only a small amount (mini-jobbers) are generally exempt from health, long-term care and unemployment insurance, but are subject to pension insurance contributions, from which they can request exemption.
How do I know which professional indemnity insurance I need?
Whether you need professional indemnity insurance depends on your profession. For some professions (e.g. doctors, lawyers, architects, tax advisers, midwives), it is required by law or by the professional chamber. Please check with your relevant chamber or an insurance adviser about the specific requirements for your profession.
Are my children automatically covered as well?
Under statutory health and long-term care insurance, children are co-insured free of charge under certain conditions as part of family insurance. In private liability insurance, minor children are generally covered under their parents’ policy, but this should be checked in detail. For other insurance policies (e.g. accident insurance), separate cover is often necessary or explicit inclusion in the policy.
