Many consumers pay money for policies they don’t even need. If you rely on the right contract, you can save a lot of money and stay optimally protected.
Insurance is intended to protect against existential risks. But many take out unnecessary policies or pay too much for outdated contracts. Consumer advocates also discourage certain insurance policies because they often cost more than they would in the event of damage.
1. Policies matter
Private liability insurance
- Why this matters: If you cause harm to others, you are responsible for it. Private liability insurance covers these costs. Children are usually insured under a family contract until the end of their first training. You need separate pet owner’s liability insurance for dogs; In some federal states, this is required by law.
- Fees and services: According to the consumer portal Finanztip, high-performing tariffs burden singles about 30 euros per year; Families usually only pay a few euros more. Make sure you have a high level of cover (at least 50 million euros) and that the contract also includes “cover for bad debts” – then your insurance will pay out if the person who actually caused the damage is uninsured or goes bankrupt.
Home construction insurance (for owners)
- Why this matters: This policy covers building damage caused by fire, tap water, or natural disasters such as storms and hail.
- Tips for choosing: Basic coverage protects against the most important hazards. Homeowners should consider additional components, such as glass or natural hazard insurance, individually. Insurance premiums vary widely. The consumer advice center advises checking conditions in case premiums rise and, if in doubt, changing provider
According to the consumer advice center, this is an “absolute must” for homeowners. Without insurance coverage, in the worst case scenario, you would have to rebuild your home yourself.
Motor vehicle liability insurance (for vehicle owners)
- Why this matters: Motor vehicle liability insurance is required by law for vehicle owners; it covers the damage you cause to others on the road. Comprehensive insurance (partial or full comprehensive) is optional and depends on the value of the vehicle. There is often a gap of several hundred euros between the cheapest and most expensive rates; For beginner drivers you can get there 1000 euros per year become. Compare each year and adjust the coverage (e.g. deductible) to the value of the vehicle.
2. Existential risk policy
Employment Disability Insurance (BU)
- Meaning and purpose: BU pays a monthly pension if you can no longer work in your trained profession due to illness or accident. Because statutory disability pensions are often insufficient, consumer advocates especially recommend this insurance to single-income families and people who have physically demanding jobs.
- What to pay attention to: Contributions depend on employment, age and health status; These policies are more expensive than liability policies, but can prevent financial ruin in an emergency. It is important to have a realistic pension amount and avoid abstract referrals (an insurance company cannot simply refer you to another profession).
Term life insurance
- Meaning and purpose: If the primary breadwinner supports the family, term life insurance protects surviving dependents in the event of death. He pays a sum of money that is often intended for loan repayment or the family’s financial future. The term and price of coverage should be chosen in such a way that it can last until the end of a larger financial obligation such as a real estate loan.
International travel health insurance
- Meaning and purpose: Treatment abroad is often expensive and not covered by mandatory health insurance. International travel health insurance covers the costs of outpatient and inpatient treatment as well as medically necessary repatriation. It usually costs only a few euros per year and is therefore useful for regular travel.
Expansion of residential buildings and natural hazard insurance
- Meaning and purpose: Natural hazard insurance can be important for homes in flood or landslide areas. This company extends building or household contents insurance to cover natural hazards such as floods, landslides, avalanches or heavy rain. Owners should check whether natural hazards are included in their contracts. From 2023/2024, many insurance companies will only offer basic protection as a package, no longer separately.
3. Optional, depending on your life situation
Home contents insurance
Household contents insurance replaces the new value of furniture and electrical equipment in the event of damage caused by fire, tap water, burglary or vandalism. It makes sense to check whether you can replace the facility using your own savings. If this happens, home contents insurance is not absolutely necessary. This makes sense for renters in areas with a high risk of theft or expensive furnishings.
Private legal protection insurance
This insurance covers legal and court costs if you have to file a claim in court. This is especially attractive for landlords, entrepreneurs or drivers. As certain risks such as family law disputes are sometimes excluded, it is worth carefully examining the areas covered and carrying out a cost-benefit analysis.
Liability insurance is required or highly recommended for dogs and sometimes horses; it covers damage caused by animals. Such insurance is not required for smaller pets (cats, rabbits).
4. Unnecessary or expensive policies
The Brandenburg consumer advice center advises that insurance should not only cover minor damage, such as Luggage, glass, glasses, cell phone or device protection insurance. These policies are often expensive and only pay for certain causes of damage.
Also from death benefit or private unemployment insurance Consumer advocates usually advise against this; They can usually be replaced by targeted savings or statutory insurance.
Many consumers also take out dual insurance – for example, credit cards often already have a travel insurance component. Caution: Many of these insurances apply onlyif the trip is paid for by credit card.
How to approach an insurance check
- Contract inventory: Make a note of all insurance policies on the list – ideally with premium costs, terms, deductibles and key benefits. Check whether multiple contracts cover the same damage.
- Protects against existential risks: Make sure the risks that threaten your existence are covered: personal liability, motor vehicle liability (if you own a car), residential property insurance (for homeowners) and, if necessary, occupational disability and term life insurance.
- Cancel unnecessary policies: Eliminate insurance policies that only cover minor damage or those that occur repeatedly. Cancel this in time.
- Compare conditions: Before the contract ends, you should compare rates. When it comes to homeowners insurance, premiums and benefits vary widely; With liability insurance, good coverage for singles costs around 30 euros per year.
- Note the terms and notice period: Many contracts renew automatically. And not everything ends on December 31st. The insurance year begins and ends on the date the contract is signed. Deadlines such as November 30 often only apply to contracts related to the calendar year, such as auto policies. Mark deadlines on your calendar so you can cancel or switch on time.
Insurance is essential if it covers existential risks. Personal liability insurance, residential buildings, and motor vehicles belong to every household. Employment disability insurance, term life insurance and international travel health offer important security depending on your life situation. On the other hand, policies for glasses, luggage, cell phones or broken glass are usually not necessary. A thorough insurance check helps to cancel unnecessary contracts, insure important contracts and thus save several hundred euros per year.
