No matter what country you’re in, getting sued or ending up in court can be the stuff of nightmares. In addition to the stress of whatever legal issue landed you there in the first place, expensive lawyer bills can mount quickly and leave a financial catastrophe in their wake. Those able to pay can often simply starve out those who can’t.
But unlike what internationals living in Germany might be used to from their home countries, legal insurance can help mitigate this risk if you’re unfortunate enough to end up in a lawsuit or in court - something that happens more in Germany than many might be used to. It's not uncommon for people to take their employers - or even their neighbours - to court. If this happens to you, in many cases, the insurance will pay your legal fees.
What does legal insurance in Germany cover?
The first thing to know about legal insurance in Germany is that there’s no “one-size-fits-all” legal insurance plan. Plans are highly individual and can cover – or exclude – a wide variety of situations. So it’s important to know exactly what you’re getting. Some plans are exclusively for personal legal situations, while others can cover you for job or employment-related legal disputes. Traffic legal insurance – yet another type - covers issues that may come up as a result of driving in Germany.
To start off, there’s four types of legal insurance most commonly found in this country. First up, there’s private legal insurance or Rechtsschutzversicherung für Privatpersonen. This kind of plan will cover expensive legal costs if you get into a dispute with a company that provided you a product or service, or with your neighbours. It can help you pay the costs of a lawyer if you want to sue for a place at a German kita, or if you get into a legal dispute with the Finanzamt – or tax office – during tax season.
Some private plans will even give you additional protection if you are charged with a criminal offence. This is called erweiteter Strafrechtsschutz. If you’re charged and have this insurance, it will pay your legal fees, typically unless you are convicted of the offence. If you are, you can expect to have to pay back the insurance company for the legal fees incurred.
Other common types of legal insurance in Germany include job-related, vehicle-related, and property-related – which we explain a bit more about below.
Who can use job-related legal insurance in Germany? What does my employer already cover?
Rather obviously, people who are self-employed in Germany or run their own businesses may need to take out their own legal insurance for disputes that might arise as a result of performing their professional duties.
The exact type of insurance or the amount of coverage can be highly individual, so it may be useful to ask for a consultation with your insurance company. Some professional associations may offer legal insurance packages to their members or include them in the cost of membership fees – so it’s a good idea to check and see what those plans may cover if you’re a member.
Employed workers in Germany are typically covered by their employer’s insurance for anything arising in the course of their duties. They’re often even covered for any injuries or accidents that might occur during their commutes to and from work.
But it can still be worth employees taking out their own job-related insurance, or Arbeitsrechtsschutz – specifically for instances where they might get into disputes with their employer, for example over a job contract. Professional associations or unions the employee might be a member of may also have their own legal insurance plans for this, so it’s a good idea to check this before taking out your own.
Are drivers the only ones who need – or can benefit from – traffic legal insurance?
The short answer is no. You don’t need to drive to benefit from traffic legal insurance.
All drivers in Germany must, by law, have a special type of public liability insurance. This is called KFZ-Haftpflictversicherung and is different from normal public liability insurance. This insurance basically means that if a driver causes an accident, their insurance pays out for any damages or injuries.
But the question of who is at fault isn’t always so clear, and people can dispute fault. This is where traffic legal insurance – or Verkehrsrechtsschutz – can help. Anyone who interacts with traffic, whether they’re a driver, cyclist, bus rider, or pedestrian – can use this insurance to assert their rights. For example, a cyclist hit by a car can use this insurance to pay for a lawyer if the driver who hit them disputes whether they were at fault.
READ ALSO: German words you need to know: Haftpflichtversicherung
What kind of property-related legal insurance is there?
Property legal insurance plans are also highly individual and often offered as add-ons to private plans as opposed to standalone plans. These are often called Immobilienrechtsschutz – or property legal insurance - Wohnungsrechtsschutz or Grundstücksrechtsschutz.
For possible disputes between landlords and tenants, different insurance companies may offer plans for either tenants (Mieterrechtsschutz) or landlords (Vermieterrechtsschutz). Apartment owners can take out plans to guard against disputes within their ownership communities – typically neighbours.
When is the insurance effective and how much does it cost?
Many German legal insurance plans won’t let you file claims right away. It may be that once you sign up for a legal insurance plan, you can’t use if for the first three to six months from when your contract becomes effective. After the waiting period, your coverage then starts.
Because legal insurance plans are so individualised, it’s hard to give hard or fast estimates as to what a plan might cost. Your deductible – or Selbstbeteiligung – will also play a role here. The higher it is, the cheaper your monthly bill will be. Although a fully loaded legal insurance plan could be a lot more expensive, some basic plans for private legal matters in Germany are available for only around €10 a month.
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