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HEALTH

What you need to know about the complicated world of German insurance

Germans love their insurances. From pet to death coverage, they've got it all. We take a look at all of the major insurance types and when you might need them.

What you need to know about the complicated world of German insurance
Photo: DPA

It’s no secret that in Germany, Versicherung, or insurance, is king. Whether it is to cover your home, car, work-life or person, you want to make sure that you are in-the-know about which services you should have. 

We are here to help with a full guide to the different types of insurances and when you might need them. 
 
Insurance for when you’re sick
 
With so many different kinds of health insurance, it’s good to know the differences. Photo: DPA
 
Krankenversicherung (health insurance) is the mack-daddy of all insurances, because without health insurance you are not even allowed to be in the country.
 
There are two basic types of health insurance in Germany – public and private. And trust us, there are some big differences between the two. 
 
Public, or statutory health insurance, is required for everyone earning less than €64,350 per year before tax, and what you pay as a contribution is adjusted for how much you earn. Certain people may opt out, like those making above this threshold or those who are self-employed.
 
If you’re a freelancer, a long-term student or a high-earner, you may be trying to decide between public or private. The main thing to keep in mind is this: statutory insurance contributions are based on income and the benefits you receive are according to need, whereas private insurance premiums are based on your risk factors and the benefits you receive are according to what’s in your contract.
 
Some 90 percent of the German population is covered by statutory sickness funds, according to the German Medical Association.
 
 
There are some insurances that you can add on top of your mandatory health insurance, such as Reisekrankenversicherung (Travel Health Insurance) and Pflegeversicherung (Care Insurance), depending on your particular needs. 
 
While not a necessity for everyone, if you find yourself frequently back-and-forth between many different countries outside of the EU, travel health insurance may be the best way to ensure that your healthcare benefits travel with you. In the same vein, care insurance, which provides funds for those who need intensive care through the form of hospice or other intensive service, may only be needed if you foresee a long-term care need for someone in your family. 
 
 
Insurance for when you may be liable
 
Let’s be real: sometimes we do stupid things. And if you hurt someone, you may be on the hook without this insurance. Photo: DPA
 
Most Germans consider Haftpflichtversicherung (third-person liability insurance) a must-have, as it protects you from personal liability in your everyday life. In a nutshell, this insurance covers participants for damages to a third party caused through careless actions on your part.
 
While this may sound a bit arbitrary, think of it this way: according to section 823 of the Civil Code in Germany, if a person causes injury to another – even accidentally – they are fully liable for any damage culpably caused.
 
This means if you accidentally drop a box off of your balcony and it lands on someone and permanently injures the person, you would be left on the hook to pay for damages. In this case, your Haftpflichtversicherung would cover these additional costs.
 
An important note for this insurance is that it does not cover people who are NOT third parties – as in your spouse, family, etc.  
 
Insurance for protecting your stuff
 
No use crying over spilled milk – but broken vases? Without this insurance, maybe. Photo: DPA
 
Hausratversicherung, or insurance of household contents, may be very useful if you value your stuff. This type of plan covers the costs if any of your home goods are stolen, damaged or otherwise harmed.
 
A home contents insurance can make particular sense if the value of your possessions rises. This is usually the case with growing families who are also expanding spatially and gradually adding higher quality purchases to their households. 
 
However, Hausratversicherung is meant to cover the things within your home – not the structure of your home itself. For example, if you live in a place with a lot of windows, glass damage is not usually covered by your household contents insurance. But never fear: Glasversicherung, or glass insurance, is an option to make sure that the possibility of a smashed window does not keep you up at night.
 
Particularly if you are a homeowner, Feuerversicherung, or fire insurance and Wohngebäudeversicherung (residential building insurance) are important for keeping your home intact. Residential building insurance is meant to reimburse residents for damages stemming from natural disasters, weather or water breaks, while fire insurance… well, it covers the costs of fire damages.
 
Insurance for getting around town
 
This is every driver’s worst nightmare, but it could be a whole lot worse without this type of insurance. Photo: DPA
 
This will likely come as a no-brainer, but car insurance, or Kfz-Versicherung, is important on German roads. In fact, a policy number is required to even register your car in Germany. So this is a must if you want to use your four wheels in Deutschland.
 
There are three basic categories of car insurance: Haftpflicht – third-party coverage, Teilkasko – partial coverage and Vollkasko – comprehensive coverage. 
 
Third-party coverage is the legal minimum coverage in Germany, and covers all damages you and your car cause to others on the road in an accident. However, this form does not cover damages made to your car if the accident was deemed your fault.
 
Partial coverage is a step up from the Haftpflicht, in that it includes all the basics, as well as protection in the case of theft, glass breakage and weather damages. However, this still will not include vandalism.
 
The comprehensive package combines the coverages of both of these and adds protection against damages made to your vehicle. This is also true when the accident is deemed your fault. 
 
Obviously the price of the coverage goes up significantly with the amount of coverage, so which plan is best for you? While there is no hard-and-fast rule, financial service company Allianz recommends the full coverage for owners of new cars, while saying many used car owners choose Teilkasko.
 
Are you one of Germany’s big city residents who don’t own a car? Your bike is up for coverage too! Fahrradversicherung, or bicycle insurance, comes at a lower price than the car version, and may be a good idea if you want to protect yourself if your fancy wheels get stolen.
 
Insurance for your day in court
 
In Germany, people go to court a lot. So much so that there is a type of insurance for it. Photo: DPA
 
Literally “law protection insurance”, Rechtsschutzversicherung will cover legal fees you incur in court or with a legal service. If you foresee a squabble with your landlord or have pesky neighbours, this may be the ticket to getting out of all of those annoying legal fees.
 
Depending on the policy, the Rechtsschutzversicherung may extend into your professional life too. Many professionals involved in risky work, such as doctors or nurses, choose insurance plans that can cover legal action taken as a result of their profession.
 
This form of insurance may not be necessary for everyone, but may be helpful when you feel you are getting ripped off by your landlord or want to negotiate a better contract. 
 
Insurance for the worst case scenario
 
Getting injured stinks. Without this insurance, bills when you are down-and-out can skyrocket. Photo: DPA
 
You know the old adage “accidents happen”? Well, they can also happen to you. For that reason, Germany has Unfallversicherung, or accident insurance. 
 
Accident insurance is intended to provide for your medical bills should you become disabled after a serious injury. While this is important for anyone in Germany, this insurance plan is extremely relevant for those who work in a job that involves manual labour or your ability to move around, as these injuries could impact work performance.
 
There are two main groups of accident insurance: the statutory accident insurance that covers accidents on the way to and from work and the private accident insurance, which is applicable for accidents in the private area, such as leisure, sports and household accidents. 
 
Depending on your job or leisure activity (we’re looking at you, bungee jumping enthusiasts) one or both forms of accident insurance may be a worthwhile investment during your time in ‘Schland.
 
Insurance for when the worst gets worse
 
Sometimes, injury means we are no longer able to work. In Germany, there is an insurance for that. Photo: DPA 
 
Berufsunfähigkeitsversicherung, or occupational disability insurance, shares a common thread with Unfallversicherung in that it protects you in the event of a severe accident, but serves a different function.
 
Unfallversicherung covers you if you incur medical expenses as a result of an accident: occupational disability insurance, on the other hand, takes effect if you are no longer in a position to pursue your profession. 
 
It makes no difference whether you have become incapacitated due to illness, bodily injury or an accident – an occupational disability insurance is valid for your entire working life and will pay the amount stipulated in the contract until the end of working years. 
 
According to a study by Nürnberger Versicherung and FAZ Institut, only 31 percent of millennials in Germany surveyed chose to have Berufsunfähigkeitsversicherung – a fact that the authors of the study say shows that young people here “seem to clearly underestimate the risk and its negative impact on living standards.” 
 
Whether or not occupational disability insurance is necessary for you will likely depend on your job and status within your family dynamic.
 
Insurance for your furry friend
 
Love them or not – pets can cause damage. In Germany, there is an insurance to make sure they don’t get you into too much hot water. Photo: DPA
 
Have you brought your pet along to Germany? Then it might be a good idea to insure your furry companion with Haustierversicherung, or pet insurance, before taking to the city streets.
 
One area of pet insurance is liability insurance, much like the human version Haftpflichtversicherung mentioned earlier. In Germany, if your pet causes any damages to another person or property, you as the owner are liable for the damage. With Haustierversicherung, these costs are covered by your insurance plan.
 
 
In addition to the liability risk, pet insurance can also be taken out to cover veterinary costs. This type of pet insurance is then called Tierkrankenversicherung, or animal health insurance, and ranges in coverage from medications to exams and even surgeries. This is usually separate from the pet liability insurance, though sometimes can be bought as a bundle package.
 
Animal health insurance is currently available in Germany for dogs, cats and horses. 
 
Insurance for your final resting place
 
We all have to die at some point. In Germany, there are a few options for making sure your loved ones are taken care of after you are gone. Photo: DPA
 
You never know what is around the corner, so life insurance is a must no matter where you live, and Germany is no different. 
 
In Germany, there are multiple forms of Risko-Lebensversicherung, or term-life insurance, that can take care of your loved ones between 10, 15 and 20 years after your death. 
 
Premiums vary depending on the amount of the plan, as well as the risk factors held by the individual seeking insurance. While this is not necessary for everyone, term-life insurance is particularly encouraged for people that are the main breadwinners in their families or have small children.
 
In Germany, however, there is another option for protecting those close to you after your final goodbye: Sterbegeldversicherung, or death expenses insurance. Intended primarily for those already at an advanced age, this kind of insurance only covers the costs of a funeral and the associated bills. 
 
While this may not sound like much, funeral guide company Funeral Arrangement Guide estimates that the average funeral in Germany costs as much as €8,000 and can soar even higher than that. With these kind of prices, it can be advantageous to have a cost plan to help cover.
 
The maximum amount available with the Sterbegeldversicherung is usually around €20,000.
 
 

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For members

HEALTH

How much more residents in Germany might have to pay for health insurance

People in Germany saw an increase in health insurance costs at the start of the year. It's now expected that they will be hiked up again next year.

How much more residents in Germany might have to pay for health insurance

Health insurance organisations are warning that costs will be hiked up again soon due to concerns over funding. 

Doris Pfeiffer, CEO of the National Association of Statutory Health Insurance Funds (GKV-Spitzenverband), told Germany’s Tagesschau that insurance funds are expecting a billion-euro deficit.

She said it was a tough year “because we don’t have particularly good prospects”.

For people paying statutory health insurance, things could become more expensive next year. Around 90 percent of people in Germany are covered by statutory health insurance.

The contribution rate is fixed by law and stands at 14.6 percent. The additional contribution that the health insurance funds set for their members was raised to 1.7 at the start of this year. 

The latest increase gave statutory insurance funds the ability to charge up to 1.7 percent on top of the standard 14.6 precent contrinution, though not all insurance funds chose to do so.

The costs are split between the employer and employee, so workers in Germany would pay half of any increase. 

READ ALSO: Reader question: How can I change my German health insurance provider?

How much could additional costs rise next year?

Due to the funding issues, health insurers expect an increase of up to 0.6 percentage points to the additional contribution threshold. What this would mean for the insured depends on a few variables such as their income and their insurer.

Someone earning €2,000 gross per month, for example, would have to pay €6 extra per month if their insurer opted to increase additional contributions by this amount. Meanwhile, a gross income of €4,000 would mean €12 extra per month. The employer’s share would be added to this. 

health insurance cards

Many health insurance cards in Germany double as a European Health Insurance Card (EHIC), meaning that they can be used across Europe. Photo: picture alliance/dpa | Jens Kalaene

“That may not sound like much at first glance,” said Pfeiffer. “But there are people who earn very little for whom this is a lot – supermarket cashiers, lorry drivers.”

It comes following a rise in fees at the start of the year. From the start of 2024, additional contributions for statutory health insurance rose by around 0.1 percent in Germany.

Why are costs increasing?

The German healthcare system is one of the most expensive in the world.

As German society ages more, costs continue to rise – and the Covid pandemic didn’t help matters. The National Association of Statutory Health Insurance Funds estimates that this year alone it will cost around €314 billion to provide care for everyone who is insured. 

The money is mainly spent on hospitalisation costs and medical treatment.

READ ALSO: Why long-term care insurance fees are likely to rise in Germany next year

Health Minister Karl Lauterbach (SPD) has so far not presented any concrete proposals on how he intends to relieve the burden on health insurance funds in future.

Instead, the system is likely to face further expenditure. Lauterbach’s hospital reform is expected to drive up costs, while proposals to pay GPs more in order to combat the shortage of doctors would also push up expenses. 

READ ALSO: German ministers greenlight plan to improve healthcare at GPs

Pfeiffer called for a plan to tackle the rising costs.

“We now finally need an approach that puts this healthcare system on a new footing,” she said.

In the coalition government’s initial agreement back in 2021, the parties vowed to support health insurance funds with more tax revenue.

But as difficult budget negotiations take place, it doesn’t look like this will happen. 

This is causing friction among the coalition made up of the Social Democrats (SPD), Greens and Free Democrats (FDP). 

Green budget politician Paula Piechotta, for instance, is unhappy about this.

The opposition CDU/CSU also taken the opportunity to swipe at the government.

“This is not acceptable,” said CDU health politician Sepp Müller. “The tense situation in the social security system cannot continue to be ignored.”

However, it should be noted that there was no plan to help provide more money to statutory health insurance under the previous Health Ministry headed by the CDU’s Jens Spahn. 

When the SPD’s Lauterbach took over in 2021, there was already a funding gap of billions of euros. 

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