Germany Insurance Information

CIA link to demographic/economic data on Germany

General Germany Insurance Information

• Compulsory Insurance:
  
  1. Workers’ Compensation (Berufsgenossenscaft);
  2. Third Party Automobile Liability;
  3. Legal Liability for:
     • Pharmaceutical Companies,
     • Airlines,
     • Hunter’s,
     • Auditors,
     • Tax Advisors,
     • Security Companies,
     • Architects,
     • Lawyers;
  4. Operators of nuclear power stations;
  5. Accident & Health.
• Non-Admitted Insurance:
  Permitted in accordance with EC regulations (The Third Non-Life Directive) except for compulsory insurances.
• Policy Wordings & Rates / Tariffs Controlled:
  There are no longer any tariffs in the German market. The German wordings are based on ADS Güterversicherung 1973 in der Fassung von 1984 or DTV Güterversicherungsbedingungen 2000.
• Policy Language:
  German.
• Types of Insurance Restricted to Government Institutions:
  

  Workers’ Compensation.

• Policy Currency:
  euro (EUR) note: on 1 January 1999, the European Monetary Union introduced the euro as a common currency to be used by financial institutions of member countries; on 1 January 2002, the euro became the sole currency for everyday transactions within the member countries. U.S. $ insurance usually not available.
• Currency Restrictions / Exchange Controls:
  No restrictions other than all transfers above DM 5,000 must be reported to the German Bundesbank. Payments may be made in any convertible currency.
• Policy Period:
  Annual although 3 and 5 year policies can be written. Tacit renewal provisions apply.
• Cancellation Provisions:
  90 day written notice by either party is required prior to expiry. Also either party has the right to cancel within one month after a claim payment has been made.
• Premium Tax, etc. paid by Insured:
  New Premium Taxes from January 1, 2007: 19% [FLEXA]; Most other lines: 19%; Life, Health, Pension, Bonds: 0; Marine Insurance no taxes for international transports; Marine Hull: 2%; 19% for national transports. Insurers are liable for Fire Brigade charges of 9% of FLEXA premium. (May 26, 2009)

• Extends IPT checks on international insurers – In an attempt to identify non-compliance with German IPT, the tax authorities are re-contacting international insurers asking for confirmation of policies written covering German risks.  This has been extended from the EU to cover the US, Canada, South Korea and Japan. (June 12, 2009)

• Insurance Companies:
  Only licensed Insurers are allowed to sell direct. Non-licensed foreign Insurers may only underwrite home-foreign business (and may do so without the involvement of an intermediary).

• Brokers:
  Agents and Brokers are common.
• Brokerage Commissions:
  (Commissions can be paid to foreign brokers not locally registered).
• Property / Business Interruption:
  12-15%; General / Public Liability: 10-15%;
  Automobile: 5-11%;
  Accident: 15-25%;
  Professional Liability: 15%.
• Broker of Record Letters:
  Required.
• Reinsurance:
  German Reinsurance Companies must be licensed. Foreign Reinsurance Companies are neither supervised nor require a license. There are no taxes on reinsurance. There are no compulsory cessions.
• Local Natural Hazards:
  Flood.
• Other Information:
  As from July 1, 1994, the Third E.C. Non-Life Insurance Directive applies. This Directive allows Insurers registered in another E.C. (now E.U.) country to underwrite risks in Federal Republic of Germany.

Careful understanding of the Pharmaceutical and Environmental Laws and their impact on insurance is a requirement for all industrial and pharmaceutical companies conducting business in Germany. [E-mail for details].

Property Insurance

• Fire:
  Standard fire perils include - fire, lightning, aircraft, explosion. Earthquake, flood, storm / tempest, burst water pipe, riot / civil commotion, malicious damage, windstorm / hurricane, vehicle impact, weight of snow / avalanche are available in the market for an additional premium.
• All Risk:
  Available.
• Coinsurance:
  100%
• Blanket Insurance:
  Available but not usual.
• Business Interruption:
  Available. Usually follow UK wordings. Indemnity period is usually 12 months but longer periods can be provided.
• Replacement Cost:
  Available.
• Discount for fire protection equipment / systems: Available. 10% for fire brigade (external); 65% for sprinkler systems.

Boiler & Machinery / Machinery Breakdown / Engineering

• Wordings:
  Local for Machinery Breakdown, Machinery Installation, Business Interruption. Financial loss due to off premises power is available by endorsement. Law requires inspections by Federal inspectors.

General / Public Liability

• Available Wordings:
  Comprehensive local policies with extensions for Employer’s Liability, Product Liability, Product Recall, Tenants Third Party Liability, etc. It has been practice to write pollution coverage including gradual pollution under separate policies.
• Comments:
  Policies are mostly written on an occurrence basis. Limits can be expressed separately for Bodily Injury and Property Damage or as a Combined Single Limit (CSL). Note: Losses reported after a policy has been canceled or coverage has been replaced by another Insurer are not covered (and the new Insurer has no responsibility to cover such loss(es)).

Automobile / Motor

• Compulsory Limits:
  Bodily Injury: DM 5,000,000; Property Damage: DM 1,000,000. Usually policies are issued with unlimited cover. The usual bodily injury limit is DM 7,500,000 per person. Personal Accident cover for drivers and passengers is available. Own Damage cover is available, with or without deductibles. Liability and Own Damage are always quoted separately. The general policy cover normally applies to the Insured and to all licensed persons driving with the Insured’s permission.
• Comments:
  The terms, conditions, and rates are strictly controlled and all vehicles (including foreign vehicles) must comply with the German Motor Law. Non-residents must register their vehicles. Coverage applies to the Insured and any licensed individual driving with the Insured’s permission. Passengers are deemed to be Third Parties (except close relatives).

Workers’ Compensation

• Comments:
  The RVO requires that compensatory benefits for work related accidents and occupational diseases be funded by employer contributions (based on type of business and prior claims experience) to local agencies (Berufsgenossenschaften) of the Social Security Scheme. All employees (including maritime workers) are protected by the Scheme. Foreign Nationals may be covered if not insured in their country of origin - careful study required. Extra-Territorial benefits are available. Medical Expenses and Occupational Disease (not all) are included.

Marine

• Available Wordings:
  German forms are usual but foreign could be possible. War rates follow London Underwriters’ scale.

Crime

• Available Coverages:
  Local fidelity, burglary / robbery forms. Various forms of surety are written by Insurers and Banks.