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I am having a look at renter legal insurances in Germany refer. The Bavaria direct says I pay 11.12 euros a month to get a rental insurance, and I should, in theory, be able to get a lawyer who supports me within a wait time of three months. It is also written that I pay about 250 euros for lawyer access.

How does their buisness model work at all? It makes no sense. Suppose I wait three months and get a lawyer to deal with my rental problem, and after the close of case immediately quit the insurance. If people did this, wouldn't the buisness basically go bankrupt? I am pretty sure there are multipile cases that could occur where the lawyer costs more than 11.2 x 3 + 250 euros

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  • What happens if you get another rental problem? If you've quit, [it sounds like] you'll have to restart the insurance and then wait three months (with problem possibly getting worse) before you'll get another lawyer to look at it. I suspect that's why most people won't quit.
    – TripeHound
    Feb 18 at 18:41

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The problem you need the lawyer for has to happen after the waiting period is over.

From your link:

Definition: Bei bestimmten Rechtsstreitigkeiten besteht eine Wartezeit. Diese bestimmt den Zeitraum, der zwischen Versicherungsbeginn und der Ursache einer Streitigkeit liegen muss, damit die Versicherung im Schadensfall greift.

Definition: There is a waiting period for certain legal disputes. This determines the period of time that must elapse between the start of the insurance and the cause of a dispute for the insurance to take effect in the event of a claim.

If you have a problem already now, you cannot use that insurance for it, even if you just wait 3 month to file the claim.

So the insurance works just like all other insurances: there is only a certain probability that you will need a lawyer, and the premium of those who don't need one make up for the costs of those who need one.

And that probability that you will have a problem that is covered by the insurance is most likely not as high as you might think (but almost exactly as high as the insurance company thinks, as that is what they do for a living), at least on average.

Of course assuming you don't yet have that problem. But the insurance company will most likely triple-check if (or just claim that) you had that problem before those 3 month, if you claim your problem randomly just happened exactly on the first day it could have occured to be covered.

Note that what you are looking at is a private insurance, which (among other areas) covers problems as a renter or problems with your own home that you live in. It does not cover if you are e.g. the landlord and your renter doesn't pay rent.

Also note that the daily cancellation period is probably just marketing, and has probably not much effect on the cost calculation (unless it attracts the wrong customers). If you need that lawyer, it doesn't matter much for the insurance if you paid 3 * 11€ or 12 * 11€.

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