Can I deduct liability insurance from my taxes in Germany?
In short
Yes, as other provident expenses (sonstige Vorsorgeaufwendungen) in the Anlage Vorsorgeaufwand of your German tax return. The cap is EUR 1,900 for employees, civil servants, pensioners and students and EUR 2,800 for the self-employed. Health and care insurance usually use up the cap, so liability insurance then saves no taxes.
What liability insurance costs and the most you can save in tax.
Example
Typical range
Personal liability, single
about EUR 40 to 120 a year
Personal liability, family
about EUR 60 to 180 a year
Tax saving on a EUR 80 premium, cap already used
EUR 0
Tax saving on a EUR 80 premium, cap free, tax rate 14 to 42 percent
about EUR 11 to 34
Premium ranges from publicly quoted tariff examples, as of September 2026.
The tax saving is our own worked example without solidarity surcharge and church tax;
in an individual case your tax adviser decides.
Worked example
Employee, EUR 45,000 gross, public health insurance
This is the calculation when only her own share of health and care insurance counts.
Own share of health and care insurance
about EUR 4,500 to 5,000
Cap for other provident expenses
EUR 1,900
Personal liability
EUR 80
Tax effect of that
EUR 0
The liability insurance saves nothing here. Health insurance still counts in full.
Why liability insurance rarely saves tax
Personal liability insurance shares its cap with health and care insurance, unemployment insurance, accident and disability insurance. Contributions to basic health and care insurance always count in full, even above the cap. For the other policies nothing is left.
For an employee on an average salary, their own share of health and care insurance alone is well above EUR 1,900. Entering the liability premium does no harm, though: the tax office (Finanzamt) calculates the better option for you.
What is different if you come from abroad
In the UK and US, personal insurance premiums are usually not deductible at all, so the German form can be surprising. Many employees in Germany are not required to file a return, but filing voluntarily often pays off for other reasons, for example commuting costs or moving costs for a new job.
In your first and last year in Germany special rules may apply, for example if you were only taxed here for part of the year or have income abroad. If you do not live in Germany and only pay tax on German income, many of these deductions are limited. In these cases a tax adviser (Steuerberater) or an income tax help association (Lohnsteuerhilfeverein) is worth it.
When it does pay off
There can only be an effect if your contributions to basic health and care insurance stay below the cap. That can happen with a very low income, but then the tax you pay is often so low that the saving is a few euros at most.
The right category matters much more for professional liability insurance. It is not a provident expense but income related expenses (Werbungskosten) or business expenses (Betriebsausgaben), and deductible without this cap.
Insurance
Where in the tax return
Effect
Personal liability
other provident expenses
usually none
Dog and horse liability
other provident expenses
usually none
Liability part of boat insurance
other provident expenses
usually none
Professional liability
income related or business expenses
full, no cap
Liability for a rented out property
expenses for rental income
full
Splitting combined policies
If you have liability and contents insurance in one policy, only the liability share counts as a provident expense. Contents insurance protects things and is not deductible for private use. The share is usually shown on the premium invoice.
The same applies to boat insurance: the liability part counts as a provident expense, the hull cover does not.
When you can skip the effort
If you are employed and in public health insurance, entering personal liability usually changes nothing. The cap is full. If you use tax software or the official portal (ELSTER), you will see this in the calculation straight away.
The better question is whether the tariff is good. Switching an old policy often saves more than any tax benefit.
Step by step
Collect the premium invoices for all policies of the year.
Separate personal from professional liability.
Enter personal liability in the Anlage Vorsorgeaufwand.
Enter professional liability as income related or business expenses.
For combined policies, use only the liability share.
Checklist
Only the liability share of a combined policy entered
Professional liability not listed as a provident expense
Liability for a rented out flat listed with rental income
Premiums paid in the calendar year, not the policy year
Receipts kept
Common mistakes
Entering contents or car hull insurance as a provident expense
Hiding professional liability among provident expenses and losing the deduction
Planning with a tax saving that does not come because the cap is full
Assuming the rules from your home country apply
Questions and answers
Frequently asked
Is it worth entering liability insurance at all?
It does no harm.
For most employees in public health insurance it does not change the result.
Is dog liability insurance deductible?
It counts as another provident expense like personal liability and usually has no effect.
Dogs used for work are different.
What about students?
The EUR 1,900 cap applies.
Without significant income there is usually no tax to reduce anyway.
And car liability insurance?
It also counts as another provident expense.
Hull cover and breakdown cover do not.
I am only in Germany for two years. Does this change anything?
The same categories apply while you are taxed here as a resident.
For the years you arrive and leave, special rules can apply, so ask a tax adviser.
Can I deduct part of it for a home office?
No, personal liability is not linked to the flat.
At most the contents insurance can be deducted in part,
