Living in Germany - Overview

A Guide to Mandatory and Important Coverage for Residents of Germany

There are some things to know about insurance here if you're planning to live and work in Germany for a longer period.

Health Insurance

Known as "Krankenversicherung", you will likely be covered by the public system if you work here as an employee. You and your employer each pay c. half of the insurance premiums, automatically deducted from your salary. About 85% of the population here is insured under the Gesetzliche Krankenkasse (GKV), with many insurance companies offering coverage. Since 1st January 2009 all Krankenkassen cost the same. WARNING: since this date, everybody working and living in Germany must be health insured (either public or private). Otherwise, you may have to pay a fine of one month's premium for each month without insurance.


If your gross annual income as an employee is currently over €52,200 p.a., you can opt out of the public system and take out private health insurance. 

The biggest difference between the two systems:

The premium for public health insurance is based on your salary while private insurance premiums are based on your age, your level of cover and, in some cases, the deductible (Selbstbeteiligung) . Despite the change in the law, all self-employed and freelancers can take out private insurance regardless of income.

Public Pension Plan

If you are an employee here, contributions to the German National Insurance system/Gesetzliche Rentenversicherung are automatically deducted from your gross salary. Normally, self employed people do not have to pay into the system. However, if you are a freelance teacher, you may well find you have to contribute 19.5% of your gross income into the public pension system.

Personal Liability Insurance - Private Haftpflicht

This insurance is not mandatory in Germany (except for car owners). It protects you from the financial consequences of injury or damage to other people or their property and is an absolute must if you don't want to risk possible lifelong compensation payments. This insurance should include "Forderungsausfall" (which means your policy will compensate you if the person damaging you doesn't have a "Private Haftpflicht"). If you live together with a partner or spouse, it's more economical to take out a family policy than to have two separate ones.

Your dog needs its own liability insurance. However, your cat is insured under the terms of your private liability insurance. 

Household Contents Insurance (Hausratversicherung)

This insurance covers the contents of your home against fire, water damage, theft, vandalism and lightning. It isn't a compulsory insurance but it is highly recommended and some landlords demand it.

Policyholders should insure their household goods for their full value and insure their homes for circa 600 Euros per square meter of living space.
Therefore, an apartment of 100 square meters would be insured for about 60,000 Euros and would cost somewhere between 70€ and 150€ a year.

Income Protection / Occupational Disability (Berufsunfähigkeit)

The German State has cut back on many established social benefits. Employees born after January 1961 are no longer entitled to a State pension if they are unable to carry out their profession because of serious illness or accident. Most expatriates, whether employees or self employed, need to consider taking out a private insurance policy to cover the worst case scenario.

A modern alternative is the so-called Critical Illness Policy, which pays out at the onset of a serious illness.

Such policies generally offer tax advantages and a combination of different kinds of cover is available, including death benefit. 
Breadwinners with young families need at least a term insurance policy (Risikolebensversicherung) which is much more economical than a traditional life assurance policy (Lebensversicherung).

Contact us today for more information on any of these types of insurance