A legal dispute can quickly cost several thousand euros – from the lawyer to the court to the expert witness. Legal expenses insurance covers these costs. Look for the right modules (Bausteine: private, employment, traffic, housing), a sensible excess (Selbstbeteiligung) and the waiting period.
Example premiums from the tariff calculator (as of July 2026). The premium depends on the modules chosen, the excess and previous claims.
What does legal expenses insurance cover?
Legal expenses insurance pays lawyers' fees, court costs and expert witness fees when you need to enforce your rights or defend yourself. It is modular – the most important modules are:
- Private legal cover (Privat-Rechtsschutz) – disputes with tradespeople, online retailers, insurers.
- Employment legal cover (Berufs-Rechtsschutz) – employment law, dismissal, formal warnings (Abmahnung).
- Traffic legal cover (Verkehrs-Rechtsschutz) – accidents, fines, driving licence.
- Housing/tenancy legal cover (Wohnungs-/Miet-Rechtsschutz) – disputes with your landlord or neighbours.
What to look out for when comparing
- Waiting period – usually 3 months (often none for traffic). Disputes that are already ongoing are not covered.
- Excess – €150–300 lowers the premium noticeably.
- Sum insured – as high as possible or unlimited; for criminal proceedings, also check the bail amount covered.
- Mediation & legal advice by phone – resolve many cases without going to court.
- Previous claims – some policies (e.g. ROLAND) provide cover despite previous claims.
Which modules do you need?
An employee with a car is well served by the combination of private, employment and traffic legal cover. Tenants add housing legal cover. If you rarely get into disputes, you can save with an excess. Owners and landlords need separate landlord legal cover (Vermieter-Rechtsschutz).
What a legal dispute can cost
A legal dispute is more expensive than many people expect. Anyone who loses in court bears the costs under the principle of § 91 of the German Code of Civil Procedure (ZPO): their own legal fees, those of the opponent and the court costs. Legal and court fees depend on the amount in dispute and are set by the Lawyers' Remuneration Act (RVG) and the Court Costs Act (GKG). The higher the amount in dispute and the more instances, the higher the bill. Expert opinions and witness expenses may be added.
A worked example using freely chosen sample values that does not reflect an actual fee table: suppose your own legal fees are €2,000, the opponent's €2,000 and the court costs €800. Whoever loses the case then has to bear €4,800, and an expert report may cause further costs. With legal expenses insurance and an excess of €200, an insured case leaves you with only that share, provided the sum insured is sufficient.
Without insurance there is help for people on low incomes: advice assistance (Beratungshilfe) for out-of-court advice and legal aid (Prozesskostenhilfe) for proceedings (§§ 114 ff. ZPO), if the claim has reasonable prospects of success. People just above the income limit receive no help and bear the full risk. For this group in particular legal expenses insurance is relevant, because it makes the cost risk predictable and stops people giving up justified claims for fear of the costs.
How an insured case works
Under the German Insurance Contract Act (§§ 125 ff. VVG) the legal expenses insurer is obliged to cover the agreed costs. You first report the case to the insurer before you instruct a lawyer or sue. The insurer examines the confirmation of cover and the prospects of success. If confirmation is missing or refused, you can invoke the arbitration or expert-opinion procedure and, in a dispute, take legal action against the insurer.
Under § 127 VVG you may choose your lawyer freely. The insurer may not prescribe a lawyer, even though it may recommend partner lawyers. If you change lawyers, make sure no double costs arise. You normally have a claim to have costs covered only for the part of the dispute that falls within the insured modules and whose cause arose after the waiting period.
Many tariffs include a telephone initial consultation with lawyers, often without an excess. Under § 34 RVG, an initial consultation for consumers is capped at €190 net unless agreed otherwise. For smaller questions this can avoid court costs altogether. Mediation, in which a neutral third party guides the parties to an agreement, is also paid for in many tariffs and often resolves conflicts faster and more cheaply than a trial.
What is not insured
Every legal expenses policy has exclusions. As a rule, disputes arising from home financing and property purchase, speculative transactions, disputes about inheritances, in some tariffs disputes with your own insurer, and intentionally committed crimes are not insured. Family and inheritance law is usually covered only by an initial consultation; the insurer does not bear the whole procedure. Read the list of exclusions in the terms.
The time of the legal breach is also important: only what arose after the start of the contract and after the waiting period is insured. If the dispute was already looming, for example because the employer had threatened dismissal, the insurer will refuse cover. Anyone who takes out a policy only after the first conflict is too late. Take out cover while no dispute is in sight and observe the waiting period.
Also note the upper limits: the sum insured applies per insured event and is often capped at an amount such as €300,000, sometimes lower for cases with an international element. In criminal and fine proceedings, bail and fee agreements are covered only to a limited extent. If you travel abroad often or own property, check whether the tariffs are sufficient for these cases and choose additional modules if necessary.
Employment, traffic and housing in everyday life
The insured event occurs particularly often in employment law. There, under § 12a of the Labour Courts Act (ArbGG), each party bears its own legal costs in the first instance, even if it wins. Anyone fighting a dismissal can therefore be left with the costs even if successful, if there is no legal expenses insurance. For employees the professional legal protection module is thus one of the most important, also because deadlines, such as the three-week period for an unfair dismissal claim, are tight.
In traffic matters the issues are accidents, fines, driving bans and disputes with the motor insurer. Depending on the tariff the module covers all vehicles of the family or only a single car, and it often pays out even if you are injured as a pedestrian or cyclist. Compare whether driver cover or vehicle cover is wanted, and check whether intentional offences or warning fines are excluded.
In housing matters the issues are rent disputes, service charge statements, deposits and neighbour disputes. Tenants often use this module; owners need their own landlord legal protection for let property. In a dispute with the landlord the waiting period often matters, since otherwise the conflict is considered to have already started. If you are planning to move anyway, take out the contract beforehand. A consumer advice centre can also help with mediation.