In practice, the following factors are particularly often decisive in determining whether damages are paid or whether you are left with the costs.

Claims protection: If the liable party cannot pay

The coverage for claims against uninsured or underinsured persons reverses the perspective. This component doesn't apply when you cause damage, but rather when someone else causes damage to you who is neither insured nor able to pay. Your own insurer then pays out to the extent of your policy, as if the person responsible were insured with them. The risk is real: analyses commissioned by the German Insurance Association have shown for years that approximately one in six households does not have private liability insurance.

The benefit is subject to conditions. Generally, you need an enforceable title against the liable party, such as a legally binding judgment or a court settlement. You must also prove that enforcement proceedings were unsuccessful or are futile. Older policies often require a minimum claim amount; for a long time, €2,500 was standard. Some modern policies waive this requirement entirely.

When checking this module, examine four points: the minimum amount of damage, its validity abroad, the inclusion of intentionally caused damage, and whether the coverage also applies if you are injured by an uninsured animal or an uninsured small vehicle.

Acts of kindness: When helping friends becomes expensive

You're helping a friend move, and her TV slips out of your hands. Or you're watering your neighbors' garden while on vacation and forget to turn off the water. In the past, insurers often rejected claims for such damages because, in cases of unpaid assistance, a tacit waiver of liability for minor negligence was assumed. Where no one is liable, no one has to pay.

In its ruling of April 26, 2016 (Case No. VI ZR 467/15), the Federal Court of Justice clarified that such a waiver of liability cannot generally be assumed if the helper is covered by liability insurance. According to the court, a waiver that only relieves the insurer of liability does not reflect the intentions of the parties involved. Nevertheless, an expressly agreed-upon clause for damages resulting from acts of kindness is worthwhile because it avoids disputes in the event of a claim. However, damages between individuals insured under the same policy generally remain excluded.

Lost keys: Expensive with central locking systems

If you lose someone else's key, for example to your rented apartment, office, or your neighbor's house, the owner can demand a replacement. If the key is part of a central locking system, the entire system may need to be replaced. The costs can then quickly reach five figures.

Basic policies often don't cover key loss or limit it to low amounts. Check whether privately and professionally lent keys are covered and what the compensation limit is. Consequential damages, such as a burglary using a found key, are only covered if the policy explicitly includes this. Personal liability insurance doesn't cover the loss of your own house or apartment keys because no third-party property is affected.

Children incapable of committing a tort: When no one is legally liable

Children under seven years of age are not liable for damages they cause to others, according to § 828 of the German Civil Code (BGB). Children between seven and ten years of age are also not liable in accidents involving a motor vehicle, railway, or cable car, unless they act intentionally. Parents are only liable under § 832 of the German Civil Code (BGB) if they have violated their duty of supervision.

In everyday life, this leads to unpleasant situations. If your five-year-old son accidentally knocks over a friend's TV while you're sitting right next to them, no one is legally liable. Without the right coverage, the insurance company won't pay, and the damage can strain the friendship. However, by including coverage for individuals who are legally incapable of committing a tort, the insurer will still cover the damage, usually up to a specified amount. You can read more about protecting the whole family in my article on essential family insurance policies.

Rented and borrowed items: The possession clause

The insurance terms exclude damage to property belonging to others that you have rented, borrowed, or are holding in your custody. Many policies include an exception for damage to rented living spaces, such as parquet flooring or tiles. Movable items, on the other hand, are often only covered by a separate add-on: a borrowed laptop, a rental bicycle, or the furnishings of a vacation apartment.

Many insurers limit this component to a maximum amount and exclude damage caused by wear and tear, deterioration, and excessive use. When reviewing the clause for damage to rented property, ensure that both premises and movable items are covered. For tenants, gradual damage is also important – that is, damage that develops unnoticed over a longer period, for example, due to moisture.

Modern everyday risks: Internet, volunteering, drones and e-bikes

Many older insurance policies date back to a time before smartphones, drones, and e-bikes. Good policies today cover actual financial losses, damages resulting from the exchange of electronic data and internet use, damages incurred while performing voluntary work, caring for other people's children, and unpaid dog-sitting. Small drones are also included in many policies up to a certain weight limit.

There are three distinctions you should be aware of. Pedelecs with pedal assistance up to 25 km/h are considered bicycles and are covered by personal liability insurance. E-scooters, on the other hand, require their own insurance license plate. And for your own dog or horse, you need separate animal owner's liability insurance.