Car Insurance in Germany: A Comprehensive Guide

Germany is renowned for its well-maintained autobahns, efficient road systems, and a strong culture of driving. For anyone residing in or relocating to Germany, understanding the intricacies of car insurance is crucial. This article provides an in-depth overview of car insurance in Germany, including types of insurance, legal requirements, costs, providers, and tips for choosing the right policy.

1. Legal Requirements for Car Insurance in Germany

In Germany, car insurance is mandatory for all motor vehicles. Without valid insurance, a car cannot be registered, and driving an uninsured vehicle is a criminal offense that can result in heavy fines and legal consequences.

The minimum legal requirement is liability insurance (Haftpflichtversicherung), which covers damage to other people, vehicles, or property caused by the insured vehicle. This type of insurance is compulsory and must be in place before you can register your car with the Kraftfahrt-Bundesamt (KBA), the German Federal Motor Transport Authority.

2. Types of Car Insurance in Germany

There are three main types of car insurance in Germany:

a) Third-Party Liability Insurance (Haftpflichtversicherung)

This is the minimum legal requirement. It covers:

• Injuries to other people

• Damage to other vehicles

• Damage to property (e.g., fences, buildings)

It does not cover any damage to your own vehicle, even if the accident is not your fault.

b) Partial Coverage Insurance (Teilkasko)

Teilkasko covers everything in liability insurance, plus:

• Theft

• Fire and explosions

• Storm, hail, lightning, and flooding

• Broken glass (windows, mirrors)

• Damage caused by animals (such as marten bites)

• Short-circuiting (sometimes)

This type of insurance is ideal for those who want protection against non-collision-related incidents.

c) Fully Comprehensive Insurance (Vollkasko)

Vollkasko includes all the benefits of Teilkasko and also covers:

• Damage to your own vehicle in an accident (even if it's your fault)

• Vandalism

• Hit-and-run damages (if the perpetrator is not found)

This type of insurance is recommended for new or expensive vehicles, leased cars, or cars bought with financing.

3. Costs of Car Insurance in Germany

Car insurance premiums in Germany depend on several factors:

• Type of coverage: Full coverage costs more than liability-only.

• Vehicle type: Engine size, age, model, and safety rating affect the cost.

• Driver’s profile: Age, driving experience, accident history, and claims history matter.

• Location: Urban areas tend to have higher premiums due to a greater risk of theft or accidents.

• No-claims bonus (Schadenfreiheitsklasse): The longer you drive without making a claim, the cheaper your premium becomes.

• Annual mileage: Lower mileage may result in a discount.

On average, third-party liability insurance can cost between €250 to €500 per year, while full coverage can range from €600 to over €1,000, depending on the vehicle and risk profile.

4. No-Claims Bonus (Schadenfreiheitsrabatt)

Germany uses a no-claims discount system that significantly reduces your premium over time. Each year you drive without making a claim moves you to a lower Schadenfreiheitsklasse (SF class), reducing your insurance cost.

For example:

• SF 0: New drivers or drivers with less than 1 year of insurance

• SF 1: After 1 year without a claim – around 30% discount

• SF 10+: Can mean a 60–70% discount

However, making a claim can move you to a higher risk class, which increases your premium.

5. Choosing a Car Insurance Provider in Germany

Germany has numerous reputable car insurance providers, including:

• Allianz

• AXA

• HUK-Coburg

• DEVK

• ERGO

• Gothaer

• R+V Versicherung

Comparison websites such as Check24.de or Verivox.de are widely used to compare quotes, coverage options, and customer reviews. It's important to compare at least 3–5 offers to find the best balance between cost and coverage.

6. How to Apply for Car Insurance

To get car insurance in Germany, follow these steps:

1. Gather your documents:

   • Vehicle registration papers

   • Driver’s license

   • Personal ID or passport

   • Bank account details (for payment)

2. Compare and choose a policy using comparison sites or by contacting providers directly.

3. Receive your eVB number (Elektronische Versicherungsbestätigung) – a digital confirmation of insurance coverage.

4. Register your car with the Kfz-Zulassungsstelle using the eVB number.

5. Receive your insurance documents and vehicle license plate.

7. Tips for Expats and Foreign Drivers

• International License: EU driving licenses are accepted. Non-EU licenses may be valid for up to 6 months.

• Driving Record: Some insurers accept no-claims history from abroad, especially from EU countries.

• Language Barrier: Many providers offer services in English. Look for companies with English-language customer service if needed.

• Canceling insurance: In Germany, insurance contracts often renew automatically. To cancel, you typically must give at least one month’s notice before the renewal date (usually by November 30 for contracts starting in January).

8. Special Considerations

Leasing or Financing a Vehicle

If you lease or finance a car in Germany, most lenders will require fully comprehensive (Vollkasko) insurance as a condition of the contract.

Company Cars

For company cars, the employer typically handles insurance. However, employees may be liable for a portion of the deductible in case of an accident.

Rental Cars

Rental car insurance is usually included in the rental fee. However, additional coverage (e.g., zero excess) is recommended for better protection.

9. Accident Procedures in Germany

In the event of a car accident:

1. Stop immediately and secure the scene with a warning triangle.

2. Call the police if there are injuries or significant damage.

3. Exchange contact and insurance details with the other party.

4. Take photos and note the time/location of the accident.

5. Report the incident to your insurance company as soon as possible.

Failure to report an accident promptly may result in the loss of coverage.

10. Conclusion

Car insurance in Germany is not just a legal requirement, but a vital layer of financial protection. With a wide range of insurance options, a structured pricing system, and a strong regulatory environment, Germany provides a robust framework for insuring vehicles. Whether you're a local driver or an expat settling in, understanding the ins and outs of car insurance in Germany will help you drive with confidence and peace of mind.

By comparing providers, understanding coverage types, and leveraging discounts like the no-claims bonus, drivers can secure the best deal for their needs while staying fully compliant with German law.