The issue of old insurance contracts from the GDR era is still relevant for many people more than three decades after the reunification of Germany. These contracts were often seamlessly transferred to the unified Germany and still accompany the insured today. The question of whether a change makes sense could be interesting for those affected.
What is GDR insurance?
GDR insurance policies, which were taken out in the German Democratic Republic before the reunification of Germany, cover a variety of insurance areas, including building, household contents, life and vehicle insurance, as the BdV reports in an online article.
In contrast to the diversity of insurance in the Federal Republic of the 1980s, where customers could choose from around 600 different providers, the residents of the GDR were faced with a completely different situation: They had no choice, as the Association of Insured Persons further reports. The insurance landscape in the GDR was shaped by Order No. 01 of the Soviet military administration in Germany, which introduced a monopolistic system, it goes on to say. Since 1969, the GDR’s state insurance company was the only provider of insurance protection.
In this system, all citizens of the GDR were equal, at least when it came to private insurance coverage. A striking example of this was motor vehicle insurance, the Association of Insured Persons continued: Anyone who owned a car was legally obliged to do so and at the same time was automatically covered by liability insurance, without the opportunity to choose the provider or negotiate the conditions.
Additional insurance options, such as health insurance, were only available to a limited group in the GDR – only 10 percent of the total population had access to these expanded insurance benefits.
You should pay attention to this before changing
After the collapse of the GDR in 1990, many existing insurance policies were seamlessly transferred to new providers, as the MDR explains online. Deciding whether it is advisable to switch from a GDR policy to a contemporary insurance policy requires weighing up various factors. As the MDR highlights, it is crucial to examine the risk spectrum and evaluate whether a new insurer offers equivalent or superior protection. Especially if you live in a region where there have already been natural disasters such as floods or earthquakes, you should check whether the risk of natural disasters covered in the old contract is still insured in a new contract, as these were often included in GDR contracts. Cost factors, such as premiums and deductibles, should also be weighed between old and new contracts.
An additional focus is on hedging against modern risks arising from technological advances, according to the MDR. It should be checked whether the new insurance covers these risks and also additional costs that may arise from damage. Examples of this include the costs of removing rubble or hotel accommodation costs if an apartment becomes uninhabitable, which are often not covered in old GDR insurance policies. The consumer advice center adds in an online article that newer risks, such as damage caused by internet use or the protection of e-car charging stations, should also be taken into account.
Professional advice from independent experts is recommended to fully understand the advantages and disadvantages of changing insurance. The consumer advice center emphasizes how essential an independent and thorough review of the contract conditions is, with particular attention being paid to the coverage of damage cases and insured amounts.
Finally, the MDR points out that offers from insurers who want to modify or terminate old policies must be treated carefully and that a careful examination of the contract conditions is essential.
D. Maier / editorial team finanzen.net