Having a car in Germany means you must get car insurance. This insurance is needed by law and helps cover costs if your car gets into an accident, gets stolen, damaged by vandalism, or affected by natural disasters. In Germany, there are three types of car insurances and as a car owner, knowing the types of insurances can help you choose the right one to protect your vehicle.
The Basics of Car Insurance in Germany
Car insurance in Germany is regulated by the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, or BaFin). BaFin sets the minimum coverage and premiums for car insurance, and monitors the compliance of insurance companies. Car insurance in Germany is divided into two categories: liability insurance and comprehensive insurance.
Liability insurance covers the damage you cause to other people and vehicles in an accident, while comprehensive insurance covers the damage to your own vehicle and other risks. You need to have at least liability insurance to drive legally in Germany, but you can also opt for comprehensive insurance for more protection. You can also add optional extras to your car insurance, such as personal injury protection, legal expenses protection, breakdown assistance, or rental car.
Types of Car Insurance in Germany
There are six main types of car insurance in Germany, each with different levels of coverage and cost. Here is a brief overview of each type:
Liability insurance (Haftpflichtversicherung): This is the most basic and mandatory type of car insurance in Germany. It covers the damage you cause to other people and vehicles in an accident, up to a certain limit. The minimum coverage required by law is €7.5 million for personal injury, €1.12 million for property damage, and €50,000 for financial loss. However, most insurance companies offer higher coverage, up to €100 million or more. Liability insurance does not cover the damage to your own vehicle or any other risks. The cost of liability insurance depends on various factors, such as your age, driving experience, vehicle type, annual mileage, and accident history. The average annual premium for liability insurance in Germany is around €300.
Partial coverage (Teilkaskoversicherung): This is an optional type of car insurance in Germany that covers the damage to your own vehicle caused by theft, break-in attempts, fire, explosion, natural disasters, collisions with animals, or glass breakage. It also covers the cost of replacing lost keys or towing your vehicle in case of breakdown. Generally, partial coverage does not cover the damage to your own vehicle caused by an accident, vandalism, or gross negligence. The cost of partial coverage depends on the value of your vehicle, the deductible amount, and the insurance company. The average annual premium for partial coverage in Germany is around €150.
Comprehensive coverage (Vollkaskoversicherung): This is the most extensive and expensive type of car insurance in Germany. It covers everything that partial coverage covers, plus the damage to your own vehicle caused by an accident, vandalism, or gross negligence. It also covers the difference between the market value and the purchase price of your vehicle in case of total loss or theft, up to a certain period. Comprehensive coverage is usually recommended for new or expensive vehicles, or for drivers who want maximum protection. The cost of comprehensive coverage depends on the same factors as partial coverage, plus the no-claims bonus (Schadenfreiheitsrabatt), which is a discount you get for every year you drive without making a claim. The average annual premium for comprehensive coverage in Germany is around €450.
Personal injury protection (Insassenunfallversicherung): This is an optional extra that covers the medical expenses, disability benefits, or death benefits for you and your passengers in case of an accident, regardless of who is at fault. It also covers the cost of transporting the injured to the hospital, or repatriating the deceased to their home country. Personal injury protection is usually not necessary, as liability insurance already covers the personal injury of the other party, and health insurance or travel insurance covers your own personal injury. The average annual premium for personal injury protection in Germany is around €50.
Legal expenses protection (Rechtsschutzversicherung): This is an optional extra that covers the legal fees, court costs, or fines in case of a dispute arising from an accident, a traffic violation, or a contract with the insurance company. It also covers the cost of hiring a lawyer, an expert witness, or a translator. Legal expenses protection is useful if you want to defend your rights, claim compensation, or challenge a decision in court. However, it does not cover the damages you have to pay to the other party, or the criminal charges you may face. The cost of legal expenses protection depends on the coverage amount, the deductible amount, and the insurance company. The average annual premium for legal expenses protection in Germany is around €100.
Breakdown assistance (Schutzbrief): This is an optional extra that covers the cost of roadside assistance, towing, repair, or replacement of your vehicle in case of breakdown, accident, theft, or vandalism. It also covers the cost of accommodation, transportation, or rental car if your vehicle is immobilised for more than 24 hours. Breakdown assistance is helpful if you want to avoid being stranded or inconvenienced by a malfunctioning vehicle. However, it may not be necessary if you have a new or well-maintained vehicle, or if you are a member of a roadside assistance club, such as ADAC or ACE. The cost of breakdown assistance depends on the coverage area, the vehicle type, and the insurance company. The average annual premium for breakdown assistance in Germany is around €30.
Here is a table that compares the coverage of liability insurance, partial coverage, and comprehensive coverage in Germany:
What do you need to consider when choosing a car insurance in Germany?
Choosing a car insurance in Germany can be a difficult, as there are many factors to consider, such as:
Your vehicle type and value: The type and value of your vehicle affect the cost and coverage of your car insurance. Generally, the more expensive, powerful, or rare your vehicle is, the more you have to pay for insurance, and the more protection you need. For example, if you have a new or luxury car, you may want to have comprehensive coverage to cover the full value of your vehicle in case of total loss or theft. On the other hand, if you have an old or cheap car, you may be fine with just liability insurance, as the repair or replacement cost may not be worth the premium.
Your driving habits and history: Your driving habits and history affect the risk and discount of your car insurance. Generally, the more you drive, the more likely you are to have an accident, and the more you have to pay for insurance. For example, if you drive a lot of kilometers per year, or in urban areas, or during peak hours, you may have to pay a higher premium. On the other hand, if you drive less, or in rural areas, or during off-peak hours, you may get a lower premium. Similarly, if you have a clean driving record, or a long no-claims bonus, you may get a discount on your insurance. On the other hand, if you have a history of accidents, violations, or claims, you may have to pay a surcharge on your insurance.
Your personal circumstances and preferences: Your personal circumstances and preferences affect the type and amount of coverage you need and want for your car insurance. For example, if you have a family, a job, or a loan that depends on your car, you may want to have more coverage to ensure your financial security and peace of mind. On the other hand, if you have a low income, a tight budget, or a high deductible, you may want to have less coverage to save money and avoid unnecessary expenses. You may also have different preferences for the quality, service, or reputation of the insurance company, or the convenience, flexibility, or customisation of the insurance policy.
Choosing car insurance in Germany can be a difficult task. It is important to compare offers from different insurance companies and carefully consider the advantages and disadvantages of each option. Additionally, it is crucial to have a clear understanding of what is covered and what is not, as well as your rights and obligations. Regularly reviewing and updating your car insurance is also necessary to ensure it aligns with any changes in your situation.
The Cost of Car Insurance in Germany
The cost of car insurance in Germany varies depending on the type and level of coverage, the insurance company, and the personal factors mentioned above. The average cost of car insurance in Germany is around €300 per year for liability insurance, €500 per year for partial coverage, and €900 per year for comprehensive coverage. However, this is just an average, and the actual cost can be much higher or lower depending on your situation.
How To Pay Less For Car Insurance In Germany?
If you want to pay less for car insurance in Germany, there are some tips and tricks you can follow, such as:
Compare different offers: The most effective way to save money on car insurance is to compare different offers from different insurance companies, and choose the one that suits your needs and budget. You can use online comparison portals, such as Check24, or Tarifcheck, to find the best deals and discounts. You can also use online calculators, such as Autoversicherung-Rechner, to estimate the cost of car insurance based on your vehicle and personal details. You should compare not only the price, but also the coverage, the service, and the reputation of the insurance company.
Choose the right coverage: Another way to save money on car insurance is to choose the right coverage for your vehicle and situation. You should not over-insure or under-insure your car, as both can cost you more in the long run. You should consider the value, age, and condition of your car, and the risks you face, and decide whether you need liability insurance, partial coverage, or comprehensive coverage. You should also consider the optional extras, such as personal injury protection, legal expenses protection, breakdown assistance, or rental car, and decide whether they are worth the extra cost. You should also check the terms and conditions of the insurance contract, and make sure you understand the exclusions, limitations, and deductibles.
Adjust the deductible: The deductible is the amount of money you have to pay out of your own pocket before the insurance company pays the rest of the claim. The higher the deductible, the lower the premium, and vice versa. You can adjust the deductible according to your financial situation and risk tolerance. For example, if you have a high income, a large savings, or a low probability of having an accident, you may choose a high deductible to lower your premium. On the other hand, if you have a low income, a small savings, or a high probability of having an accident, you may choose a low deductible to avoid a large out-of-pocket expense.
Claim the no-claims bonus: The no-claims bonus is a discount you get for every year you drive without making a claim. The longer you drive without a claim, the higher the discount, and the lower the premium. The no-claims bonus can range from 0% to 75%, depending on the insurance company and the number of years. You can claim the no-claims bonus when you switch to a new insurance company, or when you renew your existing insurance contract. You can also transfer the no-claims bonus to another person, such as your spouse, child, or friend, if they drive your car regularly.
Change the payment frequency: The payment frequency is the interval at which you pay the premium to the insurance company. The payment frequency can be monthly, quarterly, mid-yearly, or annually, depending on the insurance company and your preference. The shorter the payment frequency, the higher the administrative fees, and the higher the premium. The longer the payment frequency, the lower the administrative fees, and the lower the premium. You can change the payment frequency to suit your cash flow and budget. For example, if you have a stable income and a large savings, you may choose to pay annually to save money. On the other hand, if you have a variable income and a small savings, you may choose to pay monthly to avoid a large lump sum.
Take advantage of discounts and benefits: There are many discounts and benefits you can take advantage of to lower your car insurance premium, such as:
Bundling discount: If you have more than one insurance product with the same insurance company, such as home insurance, life insurance, or health insurance, you may get a bundling discount on your car insurance.
Multi-car discount: If you have more than one car insured with the same insurance company, you may get a multi-car discount on your car insurance.
Low-mileage discount: If you drive less than a certain number of kilometers per year, you may get a low-mileage discount on your car insurance.
Eco-friendly discount: If you drive an eco-friendly car, such as a hybrid, electric, or low-emission car, you may get an eco-friendly discount on your car insurance.
Loyalty discount: If you have been with the same insurance company for a long time, you may get a loyalty discount on your car insurance.
Group discount: If you belong to a certain group, such as a professional association, a trade union, or a club, you may get a group discount on your car insurance.
The Steps to buy and Cancel Car Insurance in Germany
Once you choose the insurance provider and the type of policy you need, buying and canceling car insurance in Germany is relatively easy and straightforward. Here are the steps to buy and cancel car insurance in Germany:
Buying car insurance in Germany
Get an eVB number (Elektronische Versicherungsbestätigung): The eVB number is a seven-digit code that proves that you have liability insurance for your car. You need to get an eVB number before you can register your car at the local vehicle registration office (Kraftfahrzeug-Zulassungsstelle). You can get an eVB number from any insurance company online. The eVB number is valid for 90 days, and it is free of charge. You can apply for the eVB number without any fee from the insurer with whom you plan to buy your car insurance.
Compare and choose a car insurance: After you get an eVB number, you can compare and choose a car insurance that suits your needs and budget. You can use online comparison portals, like Tarifcheck to find the best offers and discounts. You can also contact the insurance companies directly, or visit their local branches. You should compare not only the price, but also the coverage, the service, and the reputation of the insurance company. After all, make sure you understand what is covered and what is not, and what are your rights and obligations.
Apply for a car insurance: Once you have chosen a car insurance, you can apply for it online. You will need to provide some personal and vehicle details, such as your name, address, date of birth, vehicle identification number, and eVB number. You will also need to provide some information about your driving habits and history, such as your annual mileage, accident history, no-claims bonus, and payment frequency. You will receive a confirmation email and a letter from the insurance company, and a copy of the insurance contract and the insurance certificate (Versicherungsschein).
Register your car: After you have applied for a car insurance, you can register your car at the local vehicle registration office. You will need to bring some documents, such as your identity card or passport, driving license, vehicle inspection certificate (Hauptuntersuchung), eVB number, insurance certificate, etc. You will also need to pay the registration fees, the license plate fee, and the road tax. You will receive a registration sticker (Zulassungsplakette) and a license plate (Kennzeichen) number for your car. A new vehicle registration certificate (Fahrzeugschein) is also given at this point, which you must keep in your car at all times.
Canceling car insurance in Germany
Check the cancellation deadline and conditions: If you want to cancel your car insurance in Germany, you need to check the cancellation deadline and conditions of your insurance contract. The cancellation deadline is usually the end of the insurance year, which is either the end of the calendar year, or the anniversary of the start date of the contract. In general, you need to send a written notice of cancellation to the insurance company at least one month before the cancellation deadline, otherwise the contract will be automatically renewed for another year. You could also cancel your car insurance in Germany before the end of the insurance year, if you have a valid reason.
Selling your car: If you sell your car, you can cancel your car insurance immediately, as the new owner will have to register and insure the car under their name. You need to send a written notice of cancellation to the insurance company, along with a proof of sale, such as a sales contract or a deregistration certificate (Abmeldebescheinigung). If you need support to deregister your car in Germany, you can try the service from deregistration.de
Changing your car: If you change your car, you can cancel your car insurance within one month, as you will need a new insurance contract for your new car. You need to send a written notice of cancellation to the insurance company, along with a proof of change, such as a registration certificate or an eVB number for your new car.
Moving abroad: If you move abroad, you can cancel your car insurance within one month, as you will need to deregister and export your car, or register and insure it in your new country. You need to send a written notice of cancellation to the insurance company, along with a proof of relocation, such as a deregistration certificate or a residence certificate from your new country.
Increasing the premium: If the insurance company increases the premium of your car insurance, you can cancel your car insurance within one month, as you have the right to reject the increase and look for a cheaper alternative. You need to send a written notice of cancellation to the insurance company, along with a proof of increase, such as a notification letter or an invoice from the insurance company.
Receive a confirmation and a refund: After you send a written notice of cancellation to the insurance company, you should receive a confirmation email or letter from the insurance company, and a copy of the cancellation contract and the cancellation certificate (Kündigungsbestätigung). You should also receive a refund of the unused premium, if you have paid in advance, or a final invoice, if you have paid in arrears. The refund or the invoice will be calculated based on the actual duration of the insurance contract, and the actual risk and cost of the insurance company.
The Best Ways to Compare and Choose Car Insurance in Germany
As we have mentioned before, comparing and choosing car insurance in Germany can be a challenging task, as there are many factors to consider, and many offers to choose from. However, there are some ways to make this process easier and faster, such as:
Using online comparison portals: Online comparison portals like Tarifcheck let you to compare offers from different insurance companies, based on your personal and vehicle details. You can enter your details, such as your name, address, date of birth, vehicle identification number, required annual mileage, accident history, no-claims bonus, etc., and show you the best deals and discounts.
Using insurance brokers: Insurance brokers like MWExpat are professionals who can help you find the best car insurance for your needs and budget. They have access to a large network of insurance companies, and they can negotiate the best deals and discounts for you. They can also advise you on the type and level of coverage you need, and explain the terms and conditions of the insurance contract. Additionally, you can ask the dealer to connect you with a car insurance professional and they can help you get the best deal. However, you should be aware that independent brokers may charge a fee for their service.
Adding an additional driver to your car insurance in Germany
If you want to add an additional driver to your car insurance in Germany, you need to inform the insurance company, and pay an extra premium. The additional driver is someone who drives your car regularly, such as your spouse, child, friend, or colleague. The insurance company will ask for some details about the additional driver, such as their name, date of birth, and driving experience. The insurance company will then calculate the extra premium based on the risk and cost of the additional driver. The extra premium can be higher or lower than the original premium, depending on the age, experience, and record of the additional driver.
For example, if the additional driver is young, inexperienced, or has a history of accidents, violations, or claims, the extra premium will be higher. On the other hand, if the additional driver is old, experienced, or has a clean driving record, the extra premium will be lower. The extra premium will be added to your existing premium, and you will have to pay it in the same frequency and method as before. The additional driver will have the same coverage and rights as you, and they will be able to drive your car legally and safely.
What to Do If You Have a Foreign Driving License
If you have a foreign driving license, you may be able to use it to drive and insure your car in Germany, depending on the origin and validity of your license. Here are the general rules for foreign driving licenses in Germany:
EU or EEA driving license: If you have a driving license from an EU or EEA country, you can use it to drive and insure your car in Germany, without any restrictions or limitations. In general, you do not need to exchange or register your license, unless it expires, is lost, or is stolen. You can also renew your license in your home country, or in Germany, if you meet the requirements. However, you should be aware that some insurance companies may charge a higher premium for foreign driving licenses, as they may consider them as a higher risk.
Non-EU or non-EEA driving license: If you have a driving license from a non-EU or non-EEA country, you can use it to drive and insure your car in Germany, for up to six months after your arrival, or until your visa expires, whichever is shorter. You will also need to have an international driving permit (IDP), or a certified translation of your license, if it is not in German or English. After six months, or after your visa expires, you will need to exchange your license for a German license, or take a driving test in Germany, to continue driving and insuring your car. The exchange or the test will depend on the country of origin and the category of your license. You can check the list of countries and categories that are recognised or exempted by the Federal Ministry of Transport and Digital Infrastructure (Bundesministerium für Verkehr und digitale Infrastruktur, or BMVI). You can also check the requirements and procedures for the exchange or the test at the local driver licensing office (Führerscheinstelle).
Conclusion
Car insurance in Germany is compulsory, safeguarding against financial losses stemming from accidents, theft, vandalism, or natural calamities. The six primary types of German car insurance vary in coverage and cost: liability insurance, partial and comprehensive coverage, personal injury, legal expenses protection, and breakdown assistance.
Optional add-ons, like rental car coverage, can be included. Compare and select suitable insurance using online comparison tools, calculators, or independent brokers. To save on costs, opt for appropriate coverage, adjust deductibles, claim no-claims bonuses, alter payment frequencies, or utilise discounts.
Managing German car insurance involves purchasing, cancellation, or adding extra drivers, following prescribed steps and deadlines. Depending on your license's origin and validity, you may utilise your foreign license to drive and insure your car in Germany. Understanding insurance terms, coverage, rights, and obligations is crucial. Regularly review and update your policy as needed.