Frankfurt It was a carelessness – with unpleasant results. A pedestrian suffered injuries in a fall because she wanted to avoid an eight-year-old girl who had not looked ahead while cycling. The woman then went to court – and was right. Exactly one year ago the Higher Regional Court of Celle ruled that the child is obliged to pay damages and compensation for pain and suffering to the pedestrian (Az. 14 U 69/19) – although children under ten years of age are actually considered incapable of committing a crime.
In the end, the parents’ private liability insurance paid. The case shows how important such insurance is. Because in general, every person who causes damage to another is obliged to compensate for this damage. If the neighbour’s window breaks while playing soccer in the garden, it may still be financially bearable. But when people are injured, it quickly becomes expensive.
The policy offers “indispensable insurance protection that everyone without exception should have,” says the Association of Insureds (BdV). But what are the most important aspects that consumers need to consider?
Here are ten things customers should pay attention to:
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1) Is private liability insurance compulsory?
Despite its name, private liability insurance is not compulsory. The term comes from the fact that there is a legal obligation to be liable. In extreme cases, private liability insurance can prevent the insured from facing financial ruin due to high damage. However, the insurance also checks whether claims for damages that are made against the insured are justified and defends them if necessary. Such an insurance is therefore strongly recommended.
A current YouGov survey on behalf of the comparison portal Check24 However, according to only 78 percent of those surveyed have private liability insurance. 17 percent of the participants do not have such a contract, the rest either did not know or did not want to provide any information.
2) How much should the coverage be?
The BdV recommends a lump sum coverage of at least 15 million euros for personal injury, property damage and financial loss. However, numerous tariffs offer coverage amounts of 50 million euros or more. Rental property damage to immovable property, for example living space, should therefore be insured for at least one million euros. Rental property damage to movable, rented, lent and leased property should also be insured.
3) What amounts can an injured party expect?
In the event of property damage, private liability insurance usually covers the current value. The injured person receives the amount with which they can buy an equivalent, used item. It should not be in a better position than without the damage. Some policies advertise with a replacement value compensation. However, this is often limited to a maximum amount.
In contrast, injured persons are entitled to compensation for pain and suffering.
4) Which clauses should be included in the contract?
Consumers should make sure that the policy includes bad debt coverage, advises Lorenz Becker, who heads the private liability insurance division at Check24: “Then the insurance will also cover damage caused to policyholders by third parties if they don’t pay for the damage themselves can.”
Good policies also work when things borrowed, rented or leased are damaged or lost. For many parents, this is currently important in homeschooling: The BdV recommends looking at the insurance conditions or inquiring with the insurer about the co-insurance of the school’s loan equipment, such as tablets and laptops.
It can also make sense to reimburse the costs if a key is lost. This is particularly relevant for tenants in an apartment building, for example. “In the event of damage, the insurance company bears the costs of replacing the entire locking system and, if necessary, the temporary guarding of the building,” says Becker from Check24.
Newer policies also insure damage caused by private flights with drones or model aircraft. Most of the flying objects are insured up to a certain weight. However, separate insurance is necessary for commercial use.
Compensation claims that arise while helping with friends or neighbors are now usually covered by insurers.
5) What are the special features for families?
There are special tariffs for families so that not every person has to sign their own contract. Parents and children who live in the same household are then insured. Children of legal age remain insured until they have completed their training or studies. You don’t necessarily have to live at home anymore. As soon as children start working or get married, they must take out insurance for themselves.
Children under the age of seven represent a special case. They are not yet capable of tort and can therefore not be held liable in the event of damage. In road traffic, as described in the example above, the age limit increases to ten years. Parents only have to pay for the damage if they have violated their duty of supervision. Many insurance companies still pay in such cases, but usually up to a maximum amount.
As a rule, however, the policy does not cover damage within the insured family members. Some insurers advertise that they step in among each other in the event of personal injury. Consumers should, however, take a close look at the conditions under which this is the case.
6) What do good policies cost?
According to the BdV, there is good private liability insurance for the entire family for an annual premium of 45 to 65 euros. The consumer advocates refer to tariffs with a deductible per claim of 125 to 500 euros. Singles therefore pay 30 to 50 euros per year for comparable insurance coverage. Consumers are spoiled for choice: According to the General Association of the German Insurance Industry (GDV), a total of 131 member companies were active in the sector in 2019. In the analyzes of the consumer magazine “Finanztest”, numerous tariffs regularly score “very good”.
7) What does a top performance guarantee bring?
Some providers advertise with a best performance guarantee. This means that the insurer pays as much as the best performing competitor in any case. For the insured, however, it will be difficult to see the insurance conditions of the other providers. “We consider what the best performance guarantee is worth to be incalculable”, is the verdict of “Finanztest”. It is strongly recommended to take out insurance that is efficient even without a top performance guarantee.
8) What should consumers consider in the event of damage?
It is important that insured persons report damage to their insurer quickly. As a rule, a period of one week after the damaging event applies. It is good to document the damage by taking photos or videos. It is also advisable to coordinate with the insurer before making payments to the injured party. In the case of minor damage, consumers should also consider whether they can settle it themselves. Because after a claim, both the insurer and the insured have a special right of termination.
9) For which areas do consumers need separate protection?
It is mandatory to take out a motor vehicle liability insurance if a car or another motorized vehicle is to be registered. Only for pedelecs with motor assistance that can reach a maximum speed of 25 km / h is protection through private liability insurance.
Additional protection can also be useful for certain hobbies or sports. This includes water sports insurance for boat owners and skippers.
Anyone who has horses or dogs should think about a pet owner’s liability insurance. In some federal states, dog owner liability is even mandatory.
A builder’s liability insurance is recommended when building a house. Smaller conversions are usually covered by private liability. House and landlord’s liability insurance should be taken out for undeveloped land and rented buildings.
As the name suggests, private liability only covers damage from the private sector. Sometimes, however, the insurance also covers damage that occurs during a part-time job, such as childcare.
In principle, private liability does not pay for damage caused intentionally or damage caused by a criminal offense. In addition, it does not accept any fines for breach of contractual obligations.
10) When is it worth changing the tariff?
Many policies have gotten better recently. It is therefore worthwhile to check the insurance cover from time to time. Becker from Check24 says: “New tariffs offer more comprehensive protection, more additional services and are usually cheaper than older contracts.” In contrast to a few years ago, many insurance companies now also cover damage caused by Internet use, i.e. if the insured accidentally passes on a computer virus. The protection should also be adapted whenever living conditions change, for example when you get married. The contracts can be terminated with a notice period of three months to the end of the contract period. Otherwise, they are automatically extended by one year.
More: Which insurances you should regularly put to the test