In Germany, car insurance (Kfz-Versicherung) is mandatory. It’s part of the cost of owning a car in Germany. If your vehicle is not insured, you can’t register it, and you can’t drive it. This guide shows you how to choose insurance for your car or motorcycle.
Germany has one of the biggest auto insurance markets in Europe and the largest overall motor market on the continent. There are around 90 vehicle insurance companies in the country according to 2016 statistics. These include:
- Allianz Direct Versicherungs-AG
- AXA
- DA Direkt
- Die Bayerische
- HDI
- Helvetia
As with many European countries, you need to insure the vehicle rather than the driver in Germany. However, some comprehensive policies allow insurance of multiple drivers for the same vehicle.
Many German insurers allow second vehicle insurance on the same policy. Because of this, parents in Germany can insure vehicles belonging to their children as the second car on their policy.
The Federal Financial Supervisory Authority (BaFin) regulates the German insurance market and most companies belong to the German Insurance Association (Die Deutschen Versicherer – GDV)
Can you use car insurance from another country in Germany?
Drivers from EU/EFTA countries can use insurance from their home country. Those from outside the EU can sometimes use insurance from their home country if they have an international green card.
However, long-term residents in Germany will need to take out a German insurance policy.
Types of car insurance in Germany
There are three main types of German car insurance: third party, partial cover and comprehensive.
Third party (haftpflicht)
This is the minimum level of coverage required for drivers in Germany. It covers damage to other vehicles in the event of an accident, including medical costs. However, it doesn’t cover any of your own costs.
Partial cover (teilkasko)
Teilkasko covers everything included in third-party coverage plus some costs related to damage to your own vehicle, including theft plus fire and storm damage. However, it does not cover vandalism or any costs relating to accidents that are your fault.
Comprehensive (vollkasko)
As suggested by its name, this covers full costs including damage to your own and other vehicles in incidents that are your fault. Some vollkasko policies also cover additional costs such as those relating to disability and death resulting from the accident.
Because of the breadth of coverage, this policy is the most expensive type. Some dealerships for new cars insist on this as a minimum level policy.
Car insurance costs in Germany
As in other places, car insurance costs in Germany are based on a number of different factors including:
- driver age;
- driver experience and record;
- vehicle value;
- number of drivers insured;
- location (costs for bigger cities are usually more expensive);
- vehicle use (including purpose of use and how frequently you will drive)
You can reduce your annual premiums in various ways, including paying a higher excess/deductible (the amount you pay towards any claim), paying the annual amount in full, or reactivating your no claims bonus.
Because of the various factors involved in cost calculation, insurance premiums in Germany can vary rapidly from around €100 a year for third party coverage for cheaper or second-hand vehicles to over €1,000 a year for comprehensive coverage on top-range models.
Additional forms of car insurance in Germany
You can take out optional extra forms of car insurance in Germany. Most insurance companies will offer various add-ons including:
- Breakdown insurance – this covers the costs of your car being towed away in the event of a roadside breakdown. It also sometimes includes replacement vehicle costs and the costs of transporting ill or injured people.
- Legal insurance – covers legal expenses in the event of an incident that goes to court.
- Additional equipment coverage – if you carry or store expensive equipment in your vehicle, you can cover the costs of damage or theft if you pay a higher premium.
- Extended elementary damage – if you live or travel near mountainous areas, you may need this to protect against the risk of damage due to avalanches or extreme snowfall.
Car insurance bonuses and penalties in Germany
Germany has a no-claims bonus system (schadenfreiheitsklasse) which entitles drivers who have gone a year or more without making any claim to a discount on their annual premium.
Exact discounts can vary between insurers but as a rough guide you will be entitled to:
- Up to 35% off annual costs if one year without making a claim
- Around 45% off if three years without making a claim
- Approximately 50% off if five years without making a claim
- Up to 80% off if 15+ years without making a claim
You can often carry over no claims periods from other insurance companies, including companies from abroad. If you are moving to Germany from overseas and want to transfer a no-claims bonus, it is a good idea to request a letter from your previous insurer attesting to your no-claims period.
Companies also often penalize drivers with a poor driving record. Expect to pay an increased premium if you:
- are a young or inexperienced driver;
- have been in an accident where you were at fault;
- have any points on your license for violations such as speeding or drink driving
How to choose car insurance in Germany
You can take a number of different factors into account beyond the premium costs when shopping for car insurance in Germany. These might include:
- No-claims bonus – what discounts are offered and what is the policy around transferring bonuses from elsewhere?;
- Policy coverage – what is excluded from standard coverage, can this be added on if necessary and at what cost?;
- Excess/deductible options – what is the mandatory excess and what are the options for choosing to increase it?;
- Company reputation – how does the company perform in reviews and what is the customer feedback like?;
- Claims process – how straightforward is it, what is involved and what do the reviews say about how it works in practice?;
- Roadside assistance – does the company offer a good breakdown assistance policy?
How to apply for car insurance in Germany
To take out German car insurance, you will need to provide:
- your German driving license number
- personal ID
- other personal information relating to your driving history
- German bank account details (if paying by direct debit)
- documents relating to vehicle purchase (some insurers may ask for these)
Most insurance companies allow you to purchase an insurance policy online. If you do this, you should receive your insurance details electronically within 24 hours.
Upon purchasing auto insurance, you should receive:
- Your EVB insurance number (elektronische Versicherungsbestätigung) and insurance policy information
- EU accident statement form to use in the event of an accident
How to make a car insurance claim in Germany
If you need to make a claim with your insurer, you should contact them as soon as possible. Claims relating to accidents should be filed within two weeks of the accident. You should:
- Exchange details with the other party or parties involved in the accident
- Take pictures of any damages
- Take contact details of any witnesses to the incident
- Fill in the accident report form to submit to your insurer;
- Call the police only if the accident has resulted in serious injuries or if the other party is not present (e.g., if you have crashed into a parked car or someone else’s property and caused extensive damage)
- Call an ambulance if anyone is seriously injured and needs hospital treatment
You will need to send the relevant information to your insurer and they will let you know if you need to provide any more information. Claims should be resolved within three months. The insurer usually sorts costs out directly with companies involved (e.g., auto repair garages).
If you need to file a claim with the other party’s insurer and they don’t provide you with insurance details, you can find them by providing the license plate number to the Central Office of Car Insurers. This central office can also provide you with necessary details of insurance claims representatives in other EU member states should you be involved in an accident in another EU country.
Canceling a contract or changing provider
Beware as many German car insurance contracts renew automatically. You usually need to provide at least one month’s notice if you wish to cancel a contract or switch to another provider.
You can terminate an insurance contract early under exceptional circumstances. These include:
- increased premiums. The insurance company is obliged to provide at least one month’s notice for any premium increases. Most policies in Germany run from 1 January so you should receive notification of increase no later than 30 November.
- if you are not happy with your insurer’s handling of a claim. You will need to provide details in writing. If the insurer contests this, you may need to go through a formal complaints procedure.
- sale of vehicle. The purchaser of the vehicle automatically takes on the existing policy but has the right to cancel as long as they can confirm purchase of coverage with another insurer.
Making a complaint about a car insurance company in Germany
German auto insurance companies must accept car insurance applications under the Compulsory Insurance Act (Section 5/2). However, there are instances where they can refuse to offer a policy, such as if the applicant has previously taken out a policy with them and violated the terms of the contract.
If you feel that a car insurance company in Germany has treated you unfairly, or you are not happy with their services, you can file an official complaint. The procedure for doing this is:
- write to the complaints department of your insurer in the first instance.
- if you receive no reply or are unhappy with the outcome, you can escalate the complaint to BaFin. You can find information on how to do this here.
- you can also complain via the Insurance Ombudsman for an independent and free out-of-court resolution.
- if you are still not happy with out-of-court outcomes, you can take the case to court. However, this means that you will be responsible for your own legal fees.
How to pay less for German car insurance
Combine your insurance policies
If you have multiple vehicles, it’s often cheaper to insure them with the same company. You can also combine it with your liability insurance and home contents insurance.
Use your parents’ car insurance
If your parents live in Germany, they can insure your car as their second vehicle (Zweitwagen), and register you as an additional driver (Zusatzfahrer). Your parents will pay less for car insurance, because they have more driving experience. If you are under 25 years old, you can save a lot of money this way.
Some insurance companies also offer discounts for the children of existing customers. Ask for a Familientarife.
Look for cheaper insurance every year
Your car insurance is renewed automatically each year on January 1. You have until November 30 to cancel it. Every year in November, you should look for cheaper car insurance. Use Verivox or Tarifcheck to compare car insurance prices.
If you sell the vehicle, you can end the insurance immediately.
Choose a higher deductible
The deductible (Selbstbeteiligung) is the amount you pay yourself, before your insurance helps you. For example, if you have a 300€ deductible, and you cause 2,500€ in damages, you will pay 300€, and your insurance will pay the remaining 2,200€.
If you choose a higher deductible, your car insurance will be cheaper. Finanztip recommends a 150€ to 300€ deductible. This would make your car insurance 18% to 25% cheaper.
Pay yearly, not monthly
Make yearly payments instead of monthly payments. If you make yearly payments, you will pay 4% to 9% less.
Get Saisonkennzeichen
Seasonal plates (Saisonkennzeichen) are vehicle registration plates that only let you drive during certain months. For example, a motorcycle can have Saisonkennzeichen from April to October, or March to November. You don’t pay insurance for the months you can’t drive, so it’s cheaper. Out of season, you can’t drive the vehicle, and you can’t park it in public spaces. You must put it in storage, or find a private parking space.
Get a Werkstattbindung
If you agree to a Werkstattbindung, you can save 10% to 20% on your car insurance. If you have an accident, you must repair your car at a garage approved by your insurer. In many cases, you get better service with a Werkstattbindung. For example, you can get a free rental car while they repair your vehicle. Your claims might also be approved faster.
This option is only available for Teilkasko and Vollkasko insurance. Haftpflicht insurance does not cover repairs to your own vehicle.
Be a good driver
If you are a new driver, you will pay more for insurance. If you have more driving experience, and never have accidents, your insurance gets cheaper. German insurance companies give every driver a class (Schadenfreiheitsklasse). If you don’t make any claims, your Schadenfreiheitsklasse gets higher every year. A high Schadenfreiheitsklasse means that you are a safe driver. If you have a high Schadenfreiheitsklasse, you pay less for insurance.
Damages that are not your fault don’t affect your Schadenfreiheitsklasse.9 For example, if your insurance pays to fix a crack in your windshield, it does not affect your Schadenfreiheitsklasse. Your car insurance will not get more expensive.
| Years without claims | Schadenfreiheitsklasse | Discount |
|---|---|---|
| 2 years | SF2 | ~15% |
| 3 years | SF3 | ~30% |
| 4 years | SF4 | ~40% |
| 5 to 8 years | SF5 to SF8 | 45 to 50% |
| 9 to 15 years | SF9 to SF15 | 55 to 60% |
| 16 to 25 years | SF16 to SF25 | 65 to 70% |
| 26 years or more | SF26 and above | 75 to 80% |
If you have driving experience in other another EU country, tell your insurance company. They will count it as driving experience, and your insurance will be cheaper. Otherwise, you will be treated as a new driver, and your insurance will be more expensive. Each insurer has different rules for recognizing driving experience. They all ask for different documents.
Expat Car Insurance specialises in this. They help you find car insurance that recognises your driving experience. Most insurance brokers avoid this, because it’s a lot of work and it does not pay well.
If you have driving experience with car sharing, tell your insurance company. Some insurance companies count car sharing as driving experience, so your insurance will be cheaper.
If you have a motorcycle, tell your insurance company. It will make your car insurance cheaper.11 Insurance for a second vehicle (Zweitwagen) is also much cheaper.
If you switch to a different insurance company, you will not lose your Schadenfreiheitsklasse.
Deduct it from your taxes
In some cases, you can deduct vehicle insurance in your Steuererklärung. If you are a permanent employee, you can deduct part of your car insurance. If you are self-employed and only use the vehicle for work, you can deduct the full amount. You can only do this if you own the vehicle and the insurance policy. This page (in German) has more information. A tax advisor can also help you with this.
If you forgot to declare it, don’t worry. You can do it later, retroactively.
What do I do if I get in a car accident in Germany?
If someone is injured in the accident, you should call 112 (the police).
You should then fill a European accident report (Europäischer Unfallbericht). Write down the other person’s name, address and plate number.
If you have questions about insurance, call the Zentralruf der Autoversicherer (+4940300330300 or 08002502600). They can help you find the insurance details of the other person, even in other EU countries.
How to cancel car insurance
Your car insurance is renewed automatically every year on January 1. You have until November 30 to cancel it. Every year in November, you should look for cheaper insurance. Use Verivox or Tarifcheck to compare car insurance prices.
If you sell your vehicle, you can cancel your vehicle insurance immediately. You do not need to wait until December 31.
What else should I know?
Insurance Green Card
If you want to drive outside the European Union, you will need a Green Card (Grüne Karte). This document lists the countries in which your car insurance is valid. It looks like this. When you leave the European Union, you must show your green card at the border control. This map shows which countries accept Green Cards. In other countries, you might need to buy car insurance at the border.
