(2022) Why everyone should have personal liability insurance!

"Anyone who intentionally or negligently infringes the life, body, health, freedom, property or other rights of another person is obliged to compensate the other party for the resulting damage." (§ 823 BGB)

To prevent a minor mishap from becoming a financial disaster, every household should have liability insurance. If someone causes damage to another person, they are liable with their entire private assets - until the financial damage is fully paid. In the worst case, this can cost millions and financially ruin the perpetrator.

Private liability insurance is primarily intended to protect against existentially threatening claims that may be made against the person who caused the damage - for example, through injury to a person or fire and water damage. Liability insurance does not cover intentional damage, but gross negligence is insured.

Private liability insurance also fends off unjustified claims by third parties for the insured. The insurance company checks whether and to what extent you are obliged to pay compensation. If a legal dispute arises, the insurer not only covers the legal and settlement costs but also represents the defendant in court.

But what if you yourself are harmed by someone who is not insured? After all, about one-third of German households do not have liability insurance. For a small additional fee, you can insure so-called default cover. Your insurance will then step in if the other party is not insured and is also unable to pay. However, as the injured party, you must have exhausted all legal options against the perpetrator beforehand.