Insurance for personal accidents: Worthwhile or wasteful?
In Germany, private accident insurance is a valuable addition to the statutory accident coverage that already covers workplace and commuting accidents. Here's a guide to help you decide whether private accident insurance is suitable for you.
Existing Statutory Accident Coverage
Statutory accident insurance in Germany covers accidents that occur during work and on the way to work. Private accident insurance, on the other hand, provides additional coverage for accidents during leisure time, including worldwide coverage [1].
Scope and Coverage Details
Private accident insurance policies calculate compensation based on the severity of injury, using a fixed scale for injury compensation called the Gliedertaxe. Some policies may also include additional benefits like therapy consultations or household help [1].
Cost and Affordability
Premiums for private accident insurance depend on the coverage level and personal risk factors. Group policies provided by employers may be more cost-effective than individual policies [1].
Tax Implications
Employer-paid premiums for private accident insurance are generally taxable income for the employee. However, if the premium is under €100 annually within a group agreement, income tax is applied at a flat 20%. Some portions of the employer’s contribution can be tax-free if coverage applies to business trips [1].
Personal Circumstances
Consider your job type, hobbies, and travel habits. If you engage in higher-risk activities or travel frequently abroad, private accident insurance with worldwide coverage may offer important protection beyond statutory benefits [1].
Policy Terms and Exclusions
Understand the specific terms and conditions, including any exclusions related to illness or certain types of injuries. Clarifying these will help avoid surprises when making a claim [1].
Disability Insurance vs Accident Insurance
Disability insurance intervenes not only in the event of an accident but also if you cannot work due to an illness. If accident insurance may not be sufficient in the event of loss of working capacity, disability insurance might be a better choice [1].
Key Features of a Good Accident Insurance
A good accident insurance should pay at least 500,000 € in the event of total disability and at least 100,000 € for a 50% disability. Other features to look for include benefits from 1% disability, extended deadlines for the occurrence and recognition of disability, coverage of costs for cosmetic surgery, coverage of rescue costs in the event of an accident in the mountains, and a notice period of 3 months to the end of the insurance year for cancellation [1].
Exclusions in Accident Insurance
Loss of consciousness, infections or poisonings, damages due to atomic energy and radiation, accidents involving aircraft, participation in racing events, accidents due to war or civil war events, and the consequences of a medical treatment are often excluded by many insurers [1].
Multiple Accident Insurances
It is possible to have multiple accident insurances, but some insurers may refuse insurance coverage if you already have an accident insurance [1].
In summary, private accident insurance in Germany is typically worth considering if you want protection beyond statutory workplace accident coverage, particularly for leisure time and international incidents. Evaluating cost, coverage options, tax issues, and your personal risk level will help determine if it is suitable for you [1].
[1] Source: German Insurance Association (GDV)
A personal calculator can help you determine the cost-effectiveness of a private accident insurance policy, considering premiums, coverage level, and personal risk factors. With a personal finance focus, it's essential to compare the benefits and drawbacks of individual and group policies to make an informed decision about your insurance needs.
