🇩🇪 The Insurance to Avoid Bankruptcy in Germany

What is Privathaftpflichtversicherung and what does it cover?

Mar 22, 2026

Hi Leute, welcome to a new episode of Germany Explained.

This week’s topics are:

📺 How much will the German TV license fee increase?

🛡️The insurance that saves you from bankruptcy in Germany

At the end you’ll find our tips 😎

📺 How much will the German TV license fee increase?

The Rundfunkbeitrag (TV and radio license fee) is undoubtedly the most discussed fixed expense in Germany, especially for expats who discover they must pay it even if they never turn on a German television. This fee finances public broadcasters like ARD, ZDF, and Deutschlandfunk.

In 2027, the fee is expected to rise. The KEF (the independent commission that evaluates the broadcasters’ financial needs) has recommended increasing the monthly fee from the current €18.36 to €18.64 starting in 2027.

If the proposal passes, you won’t need to do anything; the new amount will be debited automatically. Interestingly, this is a downward revision. For 2025, a higher increase to €18.94 had been proposed, but because more households are paying into the system than initially estimated, the 2027 hike was scaled back.

An increase in Germany isn’t automatic; it requires unanimous approval from all 16 federal states (Bundesländer). In 2025, state governments failed to reach a consensus, effectively freezing the current rate. In response, broadcasters have taken the matter to the Federal Constitutional Court, alleging that political disagreement creates illegal financial uncertainty for public media. A ruling is expected by the end of this year.

Why is it mandatory?

Since 2013, the contribution is mandatory for every household, regardless of whether you own a TV or use the services. While this often confuses international residents, it is based on a pillar of the German Constitution: Staatsferne (distance from the State). The idea is that to guarantee impartial information, public media should be funded directly by citizens via a “solidarity contribution” rather than depending on government budgets.

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🛡️ The insurance that saves you from bankruptcy in Germany

There is one insurance in Germany that, while not legally mandatory, is considered absolutely indispensable: Privathaftpflichtversicherung (Private Liability Insurance). It is the insurance you hope never to use, but when needed, it is the difference between a bad scare and total financial ruin.

In Germany, the law stipulates that anyone who causes damage to a third party is liable with their entire current and future assets.

Example: You cross the street while looking at your phone; a cyclist swerves to avoid you, falls, and is seriously injured. As the person responsible, you could be held liable for their medical bills, rehabilitation, pain and suffering, and even lost wages for months. We are talking about six or seven-figure sums.

This insurance pays for accidental damages (to persons, property, or assets) that you cause to others. Despite covering millions in potential damages, the cost is very low—usually between €40 and €70 per year.

Three essential clauses to check:

Coverage Amount (Deckungssumme): Do not accept policies with coverage below €10 million; €50 million is ideal.
Loss of Keys (Schlüsselverlust): In Germany, losing the key to your apartment building or office often means the locks for the entire building must be replaced. This can cost thousands.
Protection against uninsured parties (Forderungsausfalldeckung): If someone causes you major damage but they have no insurance and no money to pay you, your insurance will step in and compensate you instead.

If you aren’t single, this insurance becomes even more affordable:

For couples: A joint policy is cheaper than two separate ones. Ensure it covers damages between partners (Haftpflichtansprüche untereinander), particularly accidental physical injuries.
For families: A “Familientarif” covers the whole household. Check if children are still covered if they move out for university or vocational training (Ausbildung).
For children: Under German law, children under 7 are generally not legally liable (deliktunfähig). If your 5-year-old scratches a neighbor’s car, you aren’t legally forced to pay. However, to maintain good relationships, look for a policy that includes a clause for deliktunfähige Kinder—the insurance will pay the neighbor even if there is no legal obligation.

Haven’t signed up yet?

Don’t wait for a million-euro accident or a lost office key. To help you navigate the German market, here you can find the most reliable and affordable policies currently available for singles, couples, and families.

Our Recommendations 😎

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This helps us enormously to fund ourselves, keep this project going, and continue producing useful, high-quality content!

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