Which insurance do you really need? Your guide through the insurance jungle
10 Jun 2025
7
Minutes
Katrin Straub
CEO at nextsure
Insurance is a complex topic. Many wonder: Which insurance do you absolutely need and which ones are just 'nice to have'? This article sheds light on the subject and helps you make the right decisions for your financial security.
The topic in brief and concise terms
Health insurance, motor vehicle liability insurance, and (depending on the federal state/profession) animal owner or professional liability insurance are often mandatory.
Although a private liability insurance is not legally required, it is of existential importance for everyone.
The disability insurance protects your income and should be taken out early.
Quick Facts: The most important insurances at a glance
Health insurance is an absolute requirement for every citizen living in Germany. No vehicle may be operated on public roads without motor vehicle liability insurance. While a private liability insurance is not legally required, it is considered indispensable for everyone. Disability insurance secures your income if you can no longer perform your profession. For certain professions, such as doctors or lawyers, professional liability insurance is mandatory. Pet owners often require special pet liability insurance, especially for dogs.
Mandatory insurance: These policies are required by law
In Germany, there is a system of insurances that are mandated by law. Health insurance is the most important; every citizen must have health insurance. Those who are publicly insured automatically have social nursing care insurance. Those with private insurance must take out a separate private nursing care insurance. For vehicle owners, motor vehicle liability insurance is essential; without it, registration is not possible. The minimum coverage amount is 7.5 million euros, but 100 million euros is recommended. Many underestimate the necessity of this basic coverage. The contributions to motor vehicle liability insurance can be claimed as special expenses for tax purposes. These basic coverages form the foundation of your financial security.
Understanding the Essential Private Liability Insurance
Although not legally required, private liability insurance is an absolute must. It protects against the financial consequences if you cause damage to others. The costs can quickly become threatening to your existence, as your liability is unlimited. Good tariffs are available from as little as five euros a month. The insurance checks whether and to what extent there is an obligation to pay damages. It also fends off unjustified claims, which is considered passive legal protection. Damages from favours are often included today. A minimum coverage amount of ten million euros is recommended. This insurance is a cornerstone for every household.
Details of the private liability insurance services
Private liability insurance covers a wide range of damages. Here are some core services listed:
Costs for restoration or replacement of damaged items.
Coverage of treatment costs and loss of earnings in the event of personal injury.
Payment of compensation or lifelong pensions in the case of severe injuries.
Protection from damage caused by domesticated small animals such as cats.
Defending against unjustified claims for damages, if necessary, also in court.
Coverage of costs for consequential damages, such as loss of use.
The cover usually extends to insured family members as well. Next, we will look at why disability insurance is so important.
Master your livelihood protection with disability insurance
The occupational disability insurance (BU) is one of the most important voluntary insurances. It pays a monthly pension if you can no longer perform your job due to health reasons. Statistically, one in four employees becomes unable to work during their lifetime. The state disability pension is often not enough to maintain the standard of living. Signing up early often secures more favorable rates. The most common causes of occupational disability are mental illnesses and musculoskeletal issues. This coverage closes a critical care gap.
Special liability insurance for professions and animal husbandry optimized
For certain professions, professional liability insurance is required by law or demanded by professional associations. This includes doctors, lawyers, architects, and tax consultants. This insurance covers damages that occur in the exercise of professional activities. For dog owners, liability insurance for dogs is mandatory in many federal states. In six federal states, this applies even to all dogs. Private liability does not cover damage caused by dogs. Dog liability insurance often costs only around 50 euros annually. While horse liability insurance is not mandatory for horse owners, it is strongly recommended. These specific policies cover risks that go beyond general protection.
Choose additional important insurance policies for individual life situations
Depending on your life situation and possessions, additional insurance can be very sensible. A contents insurance protects your belongings against damage from fire, water leaks, or burglary. For property owners, a building insurance policy is essential. It covers damage to the building itself, for example, from storms or hail. A term life insurance is important to financially secure dependents, especially if there are ongoing loans. About 16.5 percent of Germans have taken out such a policy. Many households are underinsured in this area. A personal accident insurance offers 24-hour protection, even during leisure time. Consider whether an accident insurance is sensible. These additional components round off your insurance coverage.
Checklist for sensible additional insurance:
Depending on your personal situation, the following insurance policies can complement your protection:
Legal expenses insurance: Covers legal and court costs in the event of disputes.
Travel health insurance: Important for trips, as statutory health insurance does not cover all costs abroad.
Dental insurance: Can cushion high costs for dental prostheses or special treatments.
Long-term care insurance: Bridges the gap between statutory care benefits and actual care costs.
Private pension schemes: Essential, as the state pension often does not suffice for the accustomed standard of living.
Landlord insurance: Special policies protect against loss of rental income or tenant-caused damage.
A detailed analysis of your needs is crucial here. Next, we will delve into expert tips and legal aspects.
Expert Depth: Consideration of Legal Foundations and Recent Judgments
Expert Depth: Consider Legal Foundations and Recent Rulings
The Insurance Contract Act (VVG) forms the legal basis for most insurance contracts in Germany. § 113 VVG regulates, for instance, the compulsory insurance for vehicle owners. In the case of compulsory insurance, insurers often face an obligation to contract. This means they must generally accept applications. Recent court rulings can influence the interpretation of insurance conditions. For example, there are decisions regarding the obligation to perform in cases of occupational disability or coverage in private liability insurance. Our Expert Tip: Stay informed about changes regularly or have your contracts reviewed by professionals. A thorough understanding of the conditions and current case law is invaluable in the event of a claim. Therefore, the careful selection and review of your policies are essential.
Determine and optimise your individual insurance needs
More useful links
Statistisches Bundesamt (Destatis) provides a press release with current statistical data relevant to the insurance industry.
Deutsche Rentenversicherung provides comprehensive information on the disability pension and its prerequisites.
Bundesfinanzministerium offers a glossary entry on the topic of retirement planning, explaining important terms and connections.
Bundesgesundheitsministerium provides detailed information on the services of long-term care insurance and its scope.
GDV (Gesamtverband der Deutschen Versicherungswirtschaft) delivers comprehensive statistics and data on the German insurance industry.
Bundesamt für Soziale Sicherung provides current figures and statistics on health insurance in Germany.
BAuA (Bundesanstalt für Arbeitsschutz und Arbeitsmedizin) informs about the costs of work incapacity and relevant facts in this area.
FAQ
Which insurances are mandatory in Germany?
In Germany, mandatory insurances include health insurance (either statutory or private), nursing care insurance (automatically with statutory health insurance, otherwise to be concluded privately), and third-party car insurance for vehicle owners. Depending on the federal state and the dog breed, dog liability insurance may also be mandatory. Additionally, professional liability insurance is required for certain professions.
Why is private liability insurance so important?
Private liability insurance is important because you are fully liable for damage caused to others with your entire assets. Without insurance coverage, even small accidents can lead to existentially threatening costs. It covers personal, property, and financial damages.
When should I take out disability insurance?
You should take out occupational disability insurance as early as possible, ideally when you are a pupil, student, or just starting your career. Younger people are often healthier and therefore receive more favourable premiums and better conditions.
Which insurances are particularly relevant for families?
For families, in addition to the mandatory and basic insurances such as health and personal liability insurance, it is often sensible to have life insurance for the financial protection of dependents, household contents insurance, and, where applicable, accident insurance for children. It's also crucial for the main earners to have occupational disability insurance.
Does my private liability insurance also cover damage caused by my drone?
Generally not. Drones usually require a separate liability insurance by law, as they are considered aircraft and carry special risks.
How do I find out which insurance I really need?
Analyse your personal life situation: age, marital status, occupation, income, assets, and future plans. Regularly assess your needs. A professional consultation with an independent insurance expert or a digital insurance portal like nextsure can help you identify suitable insurance and avoid unnecessary policies.
