In the land of the over-insured: necessary or unnecessary?

Whether it’s motor vehicle, liability, household contents or additional dental insurance, Germans are protected like never before. In 2022, the number of insurance contracts concluded in this country was 472.9 million. But what insurance do you really need?

Increasing number of insurance contracts: Nevertheless, there are gaps

According to a study by Statista, the number of insurance contracts concluded in Germany has increased dramatically since 1980. At that time there were around 232 million contracts, while today there are more than twice as many at 472.9 million. The reasons for this increase can be varied, be it due to legal regulations, the desire for financial security or concern for one’s own health. However, the question arises as to whether all of these insurances are really necessary.

According to an online article in the business newspaper Capital, the most frequently taken out insurance policies in Germany include private liability insurance, motor vehicle insurance, household contents and legal protection insurance, private accident insurance, occupational disability insurance and term life insurance. Surprisingly, a 2018 study by the Federal Statistical Office (Destatis) showed that Germans have worrying insurance gaps. According to the report, every second household lacks legal protection insurance and only every fourth German household has occupational disability insurance.

Keep an overview: Which insurances are unnecessary

Some insurance may be unnecessary in certain cases. This is often true if the insurance policy already covers other insurance or protections. Such insurance should be terminated quickly if possible. A typical example, according to the Finanztip portal, is taking out traffic legal protection insurance. As soon as drivers become members of an automobile club, they already have such protection. Furthermore, newly married people often do not think about combining their insurance policies, as the article adds. This applies, for example, to private liability or household contents insurance. An overview by Mitteldeutscher Rundfunk (MDR) provides information about insurance policies that only cause consumers unnecessary costs. These include, for example, cell phone or glasses insurance, for which the premium is not justified in most cases because the insured items often have a comparatively low value. Residual debt insurance is also considered unnecessary. According to an MDR article, such contracts were even reversed in Great Britain because they were viewed as unnecessary and customers received their money back.

Further insurance: obligations and recommendations

In Germany, however, there are also insurance policies that are mandatory – these include health and liability insurance, which are required for every citizen. There are also recommended insurance policies, as explained in the article by These include occupational disability insurance, term life insurance and residential building insurance for homeowners.

In the event of permanent incapacity to work due to illness or accident, many people are faced with financial difficulties. This can affect anyone, but not everyone is aware of the possible consequences and precautionary measures. The consumer advice center emphasizes what is important in good occupational disability insurance. The pension should be paid if the job you last practiced can no longer be carried out to at least 50 percent. The contract should not provide for an examination to determine whether the insured person can carry out another activity in the event of an emergency.

Other important points are that occupational disability is recognized if the insured person is more than 50 percent unable to work for six months. In addition, the insurance should pay retroactively from the first day of a six-month period and provide at least three years of retroactive pension in the event of late reporting. The option to defer contributions during the performance test if desired is also crucial. The insurer should refrain from terminating the contract or increasing the premiums if pre-existing illnesses are not concealed through no fault of their own. The insurance contract should apply worldwide and, in the event of a temporary recognition of the occupational disability claim, should not require repayment of the pensions already granted, unless the claim was justified.

Term life insurance serves to provide financial security for surviving dependents in the event of death. In the event of the insured person’s death, the insurance company pays out a predetermined sum. This money can then be used to cover ongoing costs such as mortgages or to finance the children’s education. Homeowners insurance, on the other hand, is an important protection for homeowners as it covers damage to the building itself caused by various events such as fire, storm or water. According to the Capital article, it can also be recommended.

Editorial team