The insurance industry sells a product that's easiest to sell when the customer is afraid. That's why an average household carries more policies than it needs — and typically pays €600–1,200 per year for cover that pays nothing in a real claim, or that the household will never use.
The list below is sorted by the only criterion that matters: how big would the damage be if the insured event happened, and can I bear it alone or not?
The four genuine essentials
1. Personal liability (Privathaftpflicht)
The single most important policy in Germany. Negligently injure someone and you can be on the hook for life — multi-million-euro judgements are routine. A solid policy costs €50–80 per year and covers at least €10M. Going without is taking an existential risk.
2. Disability income (Berufsunfähigkeit)
One in four working adults becomes unable to do their job at some point — usually through illness, not accident. Statutory disability pensions are not enough to live on. A BU is expensive (€40–120 per month depending on profession and age) but indispensable for anyone with their own income. The earlier signed, the cheaper.
3. Health insurance
Mandatory in Germany — the only question is statutory (GKV) or private (PKV). Rule of thumb: statutory is right for most. Go private only with sustained high income and no plan to cover a family via dependants. Switching back later is very hard.
4. Car liability (if you own a car)
Mandatory. Comprehensive only on new or leased cars. Partial cover is usually skippable on cars older than five years.
The two "may be worth it"
5. Contents insurance (Hausratversicherung)
Covers everything in your home against fire, burglary, water and storm. Worth it once your contents are worth more than €15,000–20,000 (which a normal urban flat hits quickly). €60–150 per year.
6. Legal expenses (Rechtsschutz)
Worth it if you regularly take on situations that lead to disputes (rental property, freelancing, frequent employer conflicts). For most salaried people without ongoing disputes it's comfort, not necessity. €200–400 per year.
The "almost always wrong" list
7. Dental supplemental insurance
Sounds reasonable, rarely is. Waiting periods of 8 months to 5 years, low caps in the first years, exclusions for pre-existing conditions. Nobody who actually needs a crown signs up "quickly" beforehand. Exception: young adults with healthy teeth playing the long game.
8. Phone insurance
Usually €6–12 per month — €72–144 per year. With a typical €200–400 repair you'd have to break the phone every two to three years for it to pay off. Even then, the deductible is often close to the repair price.
9. Travel luggage insurance
Almost never covers what people expect, and most claims are already covered by contents insurance or trip-cancellation policies.
10. Funeral insurance
On average pays out less than it takes in. A simple savings account with the same monthly contribution beats it almost every time.
11. Pet surgery insurance
Can make sense for dogs of known high-risk breeds. For cats or healthy mixed breeds, usually not. Premiums rise so steeply with age that saving the money instead is often better.
How to clean up in three steps
1. List every active policy
Online insurance brokers often have a "policy overview" function. Otherwise: pull the folder, all current contracts onto one page.
2. Match each policy against the list above
Essential / May be worth it / Almost always wrong — three stacks.
3. Cancel stack 3 in the next 14 days
Mind the notice periods (often 3 months before contract end). For multi-year contracts check for special cancellation rights — e.g. after a premium increase.
What remains
An average single household ends up with 4–6 policies after the audit instead of 9–12. Saved: €400–800 per year. Lost: nothing that would have paid out a cent in a real emergency.
Insurance is not an investment product and not a status symbol. It's a tool for risks you cannot bear yourself. Everything else is someone else's commission.