Insurance broker / Insurance questions / Personal liability

What is bad debt cover (Forderungsausfalldeckung) in German liability insurance?

In short

Bad debt cover (Forderungsausfalldeckung) pays you from your own German personal liability policy when the person who harmed you has no insurance and no money. You usually need a court judgment against them, a failed enforcement attempt and often a minimum loss of EUR 2,500. Good current tariffs include it at no extra cost.

Request a quote +49 3375 29 12 77

What is bad debt cover (Forderungsausfalldeckung) in German liability insurance?

What it costs

What bad debt cover costs and where the limits are, based on published information.

Example	Typical range
Good current tariff	EUR 0 extra, included in the premium
As an add-on with some providers	about EUR 4 to 5 a month
Typical minimum loss	about EUR 500 to 2,500 per claim
Personal liability with bad debt cover, single person	about EUR 40 to 120 a year

Guide values as of September 2026 from publicly quoted information. We can check the limits in your own policy terms for you.

Worked example

Uninsured cyclist, broken wrist

This is how a case runs when the person responsible cannot pay.

Compensation for pain and suffering per judgment	EUR 6,000
Destroyed e-bike, not covered by contents insurance	EUR 2,400
Total claim	EUR 8,400
Enforcement against the cyclist	failed
Minimum loss in the tariff	EUR 2,500, exceeded

Bad debt cover pays the EUR 8,400. Lawyer and court fees are paid by you or your legal expenses insurance.

How the cover works

Normally your personal liability insurance (Privathaftpflichtversicherung) pays when you damage someone else. Bad debt cover turns this around: it protects you when someone damages you and cannot pay.

Your insurer then treats the case as if the other person had held a liability policy with the same scope as yours. It pays only what that policy would have covered.

Situation	Does bad debt cover pay?
Uninsured cyclist knocks you down, treatment and loss of earnings	yes, if the conditions are met
Uninsured neighbour floods your flat	yes, minus what your contents insurance pays
Someone else's dog bites you, owner uninsured	depends on the tariff, good ones include it
Loss below the minimum, for example a scratched bike	usually no
Deliberate assault	only with victim protection in the tariff
Damage caused by a car	no, a separate fund for road accident victims handles this

The hurdles you should know

This is not quick help. You usually need a final court judgment or another enforceable title against the person responsible, plus proof that enforcement by a bailiff failed. That can take months.

Lawyer and court fees are normally not covered. Legal expenses insurance (Rechtsschutzversicherung) helps here. The cover also pays only where no one else steps in, such as your health insurance, accident insurance or contents insurance.

What is different if you come from abroad

Many countries have nothing like this in a private liability policy. In Germany it is a common part of modern tariffs, but not a legal requirement, so each policy decides the details.

Many tariffs only accept judgments from Germany or another EU country. If you are harmed on a trip home outside the EU, the cover may not apply. The German policy wording is what counts.

When not to rely on it

It does not replace your own accident, contents or legal expenses insurance. It is a safety net for rare but costly cases, such as lasting injuries caused by someone who cannot pay.

If your policy is more than about five years old, the add-on is often missing or has tight limits. Comparing with a current tariff is then worth it.

Step by step

Document the damage right away: photos, witnesses, medical reports, police.
Ask the person responsible in writing to pay.
If they do not, obtain a title, for example through a court payment order (Mahnbescheid) or a lawsuit.
Attempt enforcement and keep the result.
Report the claim to your own liability insurer with the judgment and proof of failed enforcement.

Checklist

Bad debt cover included in the policy
Minimum loss of EUR 500 or less, ideally none
Damage by animals included
Victim protection for intentional acts
Judgments from EU countries accepted

Common mistakes

Assuming every older policy has this add-on
Not securing evidence and later being unable to prove the loss
Reporting to your own insurer without a title and enforcement attempt
Forgetting that lawyer fees are not reimbursed

Questions and answers

Frequently asked

Do I always need a court judgment?

Usually yes, or another enforceable title such as an enforcement order. Some tariffs also accept a notarised acknowledgement of debt.

Does it pay small losses?

Only if your tariff has no or a low minimum loss. The threshold is often EUR 2,500.

Does it cover intentional acts?

Generally not. Tariffs with victim protection also pay for deliberately caused injuries, for example compensation for pain and suffering.

Does it apply abroad?

Often yes, but the judgment usually has to come from Germany or another EU country.

Do I have to pay extra for it?

Not with good current tariffs. Older contracts often do not include it at all.

Does it pay for accidents with a car?

No. For damage by uninsured or unknown cars there is a separate German fund for road accident victims (Verkehrsopferhilfe).

Sources

NAMMERT insurance broker

Request a quote: Personal liability

We compare several insurers and come back with a proposal. Free for you; the insurer pays our fee. You can write in English.

1Who is it for?

Personal My company

2Which insurance?

Choose as many as you like. For each one, the details an insurer needs for a quote appear below.

Personal

Business

Please review all my existing policies

3Details

Personal liability insurance (Privathaftpflicht)

Who should be covered? * Year of birth of the oldest person * Do you work in the public sector? Liability claims in the last five years * What matters to you For example work keys, a drone, a small boat, documents in English

4Your current policy

Current insurer Policy ends on What matters more to you?

5How can we reach you?

Name * Email * Phone Postcode Town Preferred contact Anything else we should know