Why is umbrella personal liability insurance important

Clauses in private liability insurance

Clauses determine the specifics of an insurance contract.


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Claims settlement limited by the sum insured

According to German law, you have unlimited liability for damage that you cause to third parties as a result of carelessness or negligence. In serious cases, claims for damages in the private sector lead to lifelong payments in the millions. Private liability insurance protects you from this everyday risk by regulating the damage incurred and covering all costs up to the agreed sum insured. The sum insured, also known as the amount of liability or coverage, determines the maximum amount that liability insurance can cover in the event of an insured loss. The special benefits of personal liability insurance are defined by further individual provisions, so-called clauses.


Supplements and restrictions in the scope of services

As with other insurances, the clauses of a liability insurance formulate all the individual provisions of a contract. In particular, the benefits of an insurance contract are expanded and limited by the small print. The clauses are generally listed at the end of the contract in the contractual conditions.

According to current law, clauses must be formulated in a clear, clear and understandable manner. Many insured persons still find it difficult to infer the specific meaning of a formulation. However, it is extremely important to study the clauses carefully: If there is a claim, the clauses have a considerable influence on the insurance cover.

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It is not uncommon for insurance companies to refuse payment by referring to the contractual clauses. For this reason, you should check the individual provisions carefully before signing the contract, so as not to experience any nasty surprises in the event of damage. If in doubt, contact your insurer and ask.


Failure coverage and passive legal protection are among the most important clauses

Numerous inclusions are extremely important in liability insurance. Here are some of them:

Failure coverage - assert your own claims for damages

The default coverage is one of the most important services of a private liability insurance and should be listed in every contract. If you suffer damage, it may happen that the polluter has neither private liability nor his own financial means to meet the claims for damages.

In this case, your liability insurance will step in and cover the costs - provided that the default cover is part of your insurance contract. This scenario is so likely because, despite the recommendation of the insurance brokers, around 15 percent of households in Germany do not have any private liability insurance.

Passive legal protection against unjustified claims

In addition to default coverage, passive legal protection is the most important clause in personal liability insurance. This clause protects you against unjustified or excessive claims for damages. The private liability insurance not only regulates justified claims up to the amount of liability, but also fends off unjustified claims against you. If your insurance company classifies damage as unjustified because you were not responsible for causing the damage or the amount of the recourse claim is inadequate, your insurer will reject the claim for damages and refuse to pay. The injured person can then sue you as the person who caused the damage. In this case, your liability insurance will lead the process and cover all extrajudicial and judicial costs.

Liability protection for children is not always effective

Liability insured persons can co-insure their partners and children in the same household free of charge. In most tariffs, the protection also applies to children who already have their own accommodation but are doing their first training, university or military and voluntary service. According to clauses of some insurers, the co-insurance of children is limited by age. It is also important that children up to the age of seven are considered to be innocent. In the case of damage in traffic, this limit is less than ten years. If your seven-year-old child causes damage, you are not liable unless the duty of supervision has been violated. The injured person is left with the costs. Since many parents feel morally obliged to pay for the damage caused by their offspring, some tariffs offer co-insurance for children who are incapable of tort.

Discount clause - financial compensation after downgrading in motor insurance

Borrowed items are usually not covered by private liability insurance - unless the inclusion of damage to borrowed items is agreed in a corresponding clause in your contract. Another clause applies to rented cars.

If you cause an accident with a borrowed car - for example that of a friend - and the owner is then downgraded by her car insurance, the so-called discount clause applies. In this case, your personal liability insurer pays compensation in order to regulate the additional costs for the vehicle owner.

Lots of tariffs, even more clauses

The insurance market has numerous private liability tariffs, which differ significantly in terms of insurance coverage and premium amount. The conditions of an insurance depend heavily on the benefits. These are listed in the contract and can be limited or expanded through corresponding insurance conditions. If a tariff appears unbelievably cheap at first glance, be sure to check the contract for clauses that greatly reduce the assumption of costs in the event of damage. Every liability has a number of clauses - the preceding ones are only a small selection - which differ from one another depending on the tariff. Before signing a contract, think about what your personal liability claims will be. The price and performance comparison of different insurances is always worthwhile.


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