Selbstbehalt

What Is Selbstbehalt?

Selbstbehalt, often referred to as a deductible or excess, is the predetermined financial amount or percentage that an insured individual must pay out-of-pocket for a covered loss before their Insurance Policy begins to pay. This concept is fundamental to Risk Management within the broader field of insurance. The Selbstbehalt acts as a threshold, ensuring that the policyholder bears a portion of the risk for minor incidents and contributes to the cost of a Claim. It is a common feature across various types of insurance, from car and health insurance to home and liability coverage. By incorporating a Selbstbehalt, insurance providers aim to reduce the frequency of small claims and encourage policyholders to exercise greater care in preventing losses.

History and Origin

The concept of policyholders sharing a portion of a loss with their insurer has deep roots in the history of insurance. Deductibles, or Selbstbehalte, emerged as a key mechanism to address issues such as Moral Hazard, where insured parties might behave less cautiously knowing they are fully covered, and to mitigate the costs associated with frequent, minor claims. Early forms of cost-sharing were present in various insurance models. In the United States, major medical insurance, which prominently featured deductibles, saw rapid adoption between 1951 and 1961, with covered individuals increasing from 108,000 to 34 million during that decade.²⁷ The underlying principle behind deductibles is to incentivize policyholders to be more mindful of their expenses, as they bear the initial financial burden. This shared responsibility helps in managing overall costs for both the insured and the insurance provider.²⁶

Key Takeaways

• Policyholder Contribution: Selbstbehalt represents the portion of a covered loss that the insured must pay before the insurance provider's Coverage begins.
• Cost Reduction: It helps reduce the overall Premium for the policyholder, as the insurer's risk exposure is lowered.
• Risk Sharing: Selbstbehalt promotes shared financial responsibility, encouraging policyholders to prevent losses and make more informed decisions about seeking claims.
• Types: Selbstbehalt can be a fixed amount per incident or per year (absolute Selbstbehalt), or a percentage of the total loss (prozentualer Selbstbehalt), sometimes with a maximum cap.²⁵,²⁴
• Application: It is a standard feature in many insurance types, including health, auto, and property insurance, and applies per claim or annually depending on the policy.²³,²²

Formula and Calculation

Selbstbehalt is not a formula in itself but rather a fixed amount or percentage that influences the final insurance payout calculation. The calculation for the insurance payout after applying the Selbstbehalt is straightforward:

Where:

• (\text{Versicherungsauszahlung}) is the amount the insurance company pays to the policyholder.
• (\text{Gesamtschaden}) is the total cost of the damage or loss incurred.
• (\text{Selbstbehalt}) is the agreed-upon amount the policyholder is responsible for. This can be a fixed monetary value (e.g., €500) or a percentage of the total loss (e.g., 10%), often with a cap.,
  ^{21
  20}This calculation directly impacts the policyholder's net financial recovery and is a key factor in Cost-Benefit Analysis when selecting an insurance plan.

Interpreting the Selbstbehalt

Understanding the Selbstbehalt is crucial for effective Financial Planning. A higher Selbstbehalt generally leads to a lower annual Premium, as the policyholder assumes a larger portion of the initial risk. Conversely, a lower Selbstbehalt means higher premiums., ¹⁹T¹⁸his trade-off requires policyholders to assess their financial capacity to cover potential out-of-pocket expenses versus the desire for lower recurring costs.

For example, if a car insurance policy has a Selbstbehalt of €500, the policyholder would pay the first €500 of any repair costs for a covered incident, and the insurer would cover the remainder up to the policy's limits. This encourages policyholders to avoid making small claims for minor dents or scratches, reducing administrative burden for the insurer and theoretically leading to more affordable insurance for everyone. The choice of Selbstbehalt also reflects an individual's personal Risk Mitigation strategy and their tolerance for absorbing unexpected costs.

Hypothetical Example

Consider a hypothetical scenario involving Sophie and her home insurance policy, which includes a Selbstbehalt. Sophie's policy has an absolute Selbstbehalt of €250 per claim.

1. Incident: A minor plumbing leak causes water damage to her bathroom, resulting in a total repair cost of €800.
2. Claim Filing: Sophie files a Claim with her insurance company.
3. Deductible Application: According to her policy, Sophie is responsible for the first €250 of the repair costs.
4. Insurance Payout: The insurance company pays the remaining amount.
   • Insurance Payout = Total Damage - Selbstbehalt
   • Insurance Payout = €800 - €250 = €550

In this example, Sophie pays €250 out-of-pocket, and her insurance provider covers €550 of the repair costs. This demonstrates how the Selbstbehalt works to share the financial burden of a loss between the insured and the insurer. Without the Selbstbehalt, the insurance company would bear the entire €800, potentially leading to higher premiums for all policyholders.

Practical Applications

Selbstbehalt is a ubiquitous feature across numerous insurance sectors, serving as a cornerstone of modern Underwriting practices.

• Automobile Insurance: In car insurance, Selbstbehalt is standard for comprehensive and collision Coverage. A higher Selbstbehalt can significantly reduce annual Premium payments.
• Health Insurance:¹⁷ Private health insurance policies in Germany frequently incorporate a Selbstbehalt, where individuals pay a certain amount of their medical expenses annually before the insurer covers the rest. This can be a fixed amount or a percentage of costs., The German Versicherun¹⁶g¹⁵svertragsgesetz (VVG), or Insurance Contract Act, provides the legal framework for insurance contracts, including provisions that can allow for Selbstbehalt agreements.,
• Property Insuran¹⁴c¹³e: For homeowners and renters insurance, a Selbstbehalt applies to covered perils like fire or theft. Some policies may have specific, higher deductibles for certain events, such as natural disasters.
• Liability Insuran¹²ce: Many liability policies, including professional and general liability, also include a Selbstbehalt, ensuring the insured party retains some financial accountability for smaller claims.

The consumer perspective on Selbstbehalt is well-documented by organizations like Verbraucherzentrale e.V., which provides guidance on when a Selbstbehalt makes sense for consumers, emphasizing the balance between lower premiums and potential out-of-pocket expenses. Similarly, the Insuranc¹¹e Information Institute (III) explains how deductibles work to share risk and can lead to lower premiums.

Limitations and Cri¹⁰ticisms

While Selbstbehalt serves as a vital tool in Risk Management by mitigating Moral Hazard and reducing administrative costs for small claims, it also presents certain limitations and criticisms. A primary concern is the potential for significant out-of-pocket expenses for policyholders, especially with higher Selbstbehalte. This can lead to individuals delaying or foregoing necessary care or repairs to avoid meeting their deductible, potentially exacerbating issues and leading to greater costs down the line. This is particularly re⁹levant in health insurance, where high deductibles can impose substantial financial burdens on individuals and families, potentially impacting their health outcomes.

For instance, studies ⁸have explored how high-deductible health plans, while offering lower monthly Premium costs, can result in increased out-of-pocket burdens for low-income insured individuals. Critics argue that this⁷ cost-sharing mechanism, while financially beneficial for insurers by reducing claim frequency and amounts, may disproportionately affect vulnerable populations. Balancing the benefits of lower premiums with the potential financial strain of a high Selbstbehalt requires careful consideration by policyholders during their Financial Planning.

Selbstbehalt vs. Eigenanteil

The terms "Selbstbehalt" and "Eigenanteil" are frequently used interchangeably in the German-speaking financial and insurance landscape, often referring to the same concept of the insured party's financial contribution to a loss. However, there can be subtle differences in their common usage or specific contexts.

• Selbstbehalt: This term generally refers to the predetermined amount or percentage that the policyholder pays for a covered loss before the insurance company's Coverage takes effect. It is explicitly stated in the Insurance Policy and functions as a deductible.
• Eigenanteil: Wh⁶ile often synonymous with Selbstbehalt, "Eigenanteil" (literally "own share" or "own contribution") can sometimes be a broader term encompassing any personal financial contribution, including co-payments or specific fees that are not necessarily part of a deductible structure. For example, in public healthcare systems, an Eigenanteil might refer to a statutory co-payment for medication or doctor visits, which differs from a traditional annual deductible that applies before comprehensive coverage.,

In essence, while all ⁵Selbstbehalte are a form of Eigenanteil, not all Eigenanteile are necessarily structured as a Selbstbehalt. For most practical purposes in insurance, if a fixed or percentage amount is subtracted from a Claim payout before the insurer pays, it is a Selbstbehalt, serving the same function as a Deductible.

FAQs

Why do insurance policies include a Selbstbehalt?

Insurance policies include a Selbstbehalt to reduce the Premium costs for policyholders and to encourage more responsible behavior. By making policyholders bear a small portion of the loss, insurers reduce the number of minor claims and minimize the administrative costs associated with processing them. This shared Liability helps to manage overall insurance costs.

Can I choose my Se⁴lbstbehalt amount?

Often, yes. Many insurance providers offer a range of Selbstbehalt options. Choosing a higher Selbstbehalt typically results in a lower monthly or annual Premium, as you are taking on more of the initial financial risk. Conversely, a lower Selbstbehalt means higher premiums. It's a balance to consider based on your personal financial situation and risk tolerance.

Does Selbstbehalt ³apply to every claim?

The application of Selbstbehalt depends on the specific Insurance Policy terms. It can apply per claim (e.g., in auto insurance for each accident) or annually (e.g., in private health insurance, where once the annual Selbstbehalt is met, the insurer pays 100% of covered costs for the rest of the year). It is crucial to review your policy documents to understand how your Selbstbehalt is applied.,

Is a higher Selbs²t¹behalt always better?

A higher Selbstbehalt is not always better; it depends on your financial capacity and how frequently you anticipate needing to make a Claim. While a higher Selbstbehalt leads to lower regular Premium payments, it means you will pay more out-of-pocket if an insured event occurs. It is essential to choose a Selbstbehalt amount that you can comfortably afford in an emergency without undue financial strain. This is a key aspect of sound Financial Planning.