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Planning to drive in Germany? In this article, you will learn why you need car insurance in Germany, what are the different types, how to choose a suitable one, ways to save money on car insurance, and more.
Moving to Germany or new in Germany? Check out our Support Page for all the resources you need!
Why do you need car insurance in Germany?
Car accidents are more often than you think
Do you know that there were more than 1 million car accidents in Germany only in the first half of the year 2020, according to the Statistisches Bundesamt? It means that there was a car accident every 15 seconds! And this statistic does not include those accidents where the police were not involved.
Without car insurance, it can easily cost you a lot of money when you have a car accident in Germany.
Car insurance in Germany is needed to register your car
If you plan to drive in Germany, you should know that you may not drive on the road before you have registered your car. You can register your car with one of the below ways:
- At your local car registration office (Kraftfahrzeug Zulassungsstelle): You should make an appointment in advance as there are often many people and the waiting time is long
- You may be able to register your car online (more info here)
- In some cities, you may register your car at the citizens’ office (Bürgerbüro)
Even if you are just moving from one city to another city in Germany, you will need to register your car because your German number plate displays a city code that shows where your car is registered.
For example, a car that is registered in Munich has a number plate that starts with an “M”.
An eVB number is a proof of your car insurance
The documents needed to register your car vary depending on if you are registering a new car or a used car. However, there are at least two things that you definitely need: Your ID and your eVB number.
An eVB number (elektronische Versicherungsbestätigung) is an electronic insurance confirmation, which serves as a proof that your car is insured when you register it. That is why you will need car insurance if you plan to drive in Germany.
Different kinds of car insurances (Kfz-Versicherung) in Germany
There are three kinds of car insurance in Germany.
Car liability insurance in Germany (Kfz-Haftpflichtversicherung)
What is car liability insurance in Germany?
This car insurance is required by law in Germany.
You must have car liability insurance if you want to drive in Germany. The insurance covers all damage or injuries you cause to other people or objects, including the medical expenses. However, it does not cover the damage for you and your own car. It makes sense to have this insurance anyway as it can cost you a fortune even if you have just a small accident in Germany.
This insurance is different from the normal liability insurance (Haftpflichtversicherung) as it is specific for vehicle driving.
What is the minimal legal insured amount for car liability insurance in Germany?
Car liability insurance is the minimal legal requirement to drive in Germany to ensure that people who are injured by cars can be compensated.
Below are the minimum insured amounts you need for your car liability insurance in Germany:
- 7.5 million Euros for personal injury
- 1.12 million Euros for property damage
- 50,000 Euros for financial loss
It may sound a lot. But actually, these minimum insured amounts are rather low, especially when you have an accident that involves more injured people. It is recommended to have car liability insurance in Germany with a total insured amount between 50 to 100 million Euros. Actually, it is quite common that car insurance companies in Germany offer these higher insured amounts nowadays.
Partial car insurance in Germany (Teilkasko)
This car insurance is not required by law in Germany. It includes the coverage of car liability insurance but with more extra protection. For example, partial car insurance in Germany always covers the below:
- Damage caused by flooding, hail, storm, and lightning
- Damage by fire, explosion, and short circuit
- Loss due to robbery and theft
- Glass damage
- Damage caused by game animals, e.g. deer
You can often insure additionally for damage caused by other animals and other natural hazards. Besides, it is also a good idea to include marten bites as these animals actually cause a lot of car damage in Germany. Martens are attracted by the warmth of the car engine and like to bite on rubber and plastic (your hoses and wires in the car).
So, partial car insurance basically covers damage that is caused by external factors, with an exception that vandalism is not covered.
Comprehensive car insurance in Germany (Vollkasko)
Comprehensive car insurance in Germany is not required by law. It includes the coverage of liability car insurance and partial car insurance, but with some more protection. Comprehensive car insurance is the most extensive car insurance, and it is also the most expensive option.
Comprehensive car insurance in Germany always covers the damage of your own car and injury to yourself in the below situations:
- When a car accident is caused by you
- When the other driver causing the accident is not found
- In the case of vandalism
Note that you might be required to have comprehensive car insurance in Germany if you finance your car with leasing or with a credit.
How to find suitable car insurance in Germany?
1. Partial car insurance vs comprehensive car insurance in Germany
Both partial car insurance and comprehensive car insurance are not required by law in Germany. However, it often makes sense to have them. Partial car insurance is cheaper, but it doesn’t cover all kinds of damage. Comprehensive car insurance has more extensive coverage, but it may not worth it for every car.
You can consider the below factors to decide which car insurance to choose:
How old is your car?
Comprehensive car insurance is advisable for new cars up to five years old. When you spend a lot of money buying your new car, it makes sense to have decent car insurance to protect it. Comprehensive car insurance will pay for damage to your own car, even if the accident is your fault.
On the other hand, if you have an old car which is not so valuable anymore, it may not worth paying such expensive comprehensive car insurance. You will need to consider the higher insurance cost versus your car’s value to make a decision. Very often, partial car insurance is sufficient for protecting old cars.
How do you finance your car?
As mentioned before, if you finance your car with leasing or credit in Germany, you will often be required to have comprehensive car insurance. Even though comprehensive car insurance is not required by law, most institutions will require it if you finance your car purchase through them. Very often, comprehensive car insurance is also required by rental agencies.
2. What extra features to consider for car insurance in Germany?
Coverage for damage due to mudflows and avalanches
This is especially important if you live next to a mountain. If you live in a risk area, the premium will be higher accordingly. You have to check which car insurance policy covers such damage as not all companies offer this coverage.
Coverage for optional equipment
If you have a lot of optional equipment in your car, you should look for a car insurance policy that covers your optional equipment. Make sure to read the car insurance policy to see what is defined as optional equipment and its coverage.
Coverage for animal damage
As mentioned before, it is a good idea to include damage due to marten bites in your car insurance policy. Marten bites happen in Germany much more than you think. They alone cause tens of millions of Euros of damage to car cables every year.
You can also opt for additional protection that covers other animals’ damage. It makes sense to do so, especially if you live in a rural area.
Luckily I have never had an accident that involves an animal. But my husband once crashed into a fox when he was driving 200 km per hour on the highway in the middle of the night. His car was damaged afterward and the damage was covered by his car insurance.
Replacement value vs time value
If you have a new car, you should get a car insurance policy that pays the replacement value of your car in case of total damage. Replacement value is the full value of your car when you register it. Time value is the current value. As a new car can depreciate very quickly, in case of a total loss in the first years, you will get much less compensation if your car insurance only pays according to the time value.
Breakdown car insurance (Schutzbriefversicherung)
If you have to commute with your car or need to drive a lot, it may make sense to include breakdown car insurance. Breakdown car insurance covers the cost if your car needs to be towed after an accident. This also includes the expense of a rental car when your car is being repaired and the transportation cost of the injured people when needed.
You can add the breakdown car insurance as an additional insurance option when you get your car liability insurance. It is usually not much more expensive than your normal car liability insurance (around 5 – 20 Euros per year) and often covers you in other European countries.
Note that towing your car will cost between 135 to 300 Euros without the breakdown car insurance. Therefore, breakdown car insurance will also make sense for families who like to go on vacation with their cars.
Read more: Moving to Germany – Complete Expat Guide
3. How to find the best car insurance in Germany?
What is a Schadensfreiheitsklasse (SF-Klasse)?
Literally, Schadensfreiheitsklasse means no-claim class. It is basically a grading system used by car insurance companies in Germany to decide how much one pays. The grade starts at SF 0, and will slowly increase every year if you don’t have a car accident. The maximum grade is SF 35. You will get the cheapest car insurance premium if you reach this grade (Some car insurance companies have the grade until SF 50).
You can see it as a grading system. The better you drive, the better grade you get and the cheaper your car insurance will be. On the other hand, if you often have car accidents, you will have a bad grade and thus need to pay more for your car insurance.
That is why it can be very expensive for new drivers to get their car insurance in Germany. Very often, they will start at SF 0 and have to pay like 1,000 Euros per year. It can take many years for them without an accident to achieve a higher grade and a cheaper car insurance premium.
Read more: Tax Return in Germany – Guide for Expats
What determines your car insurance cost in Germany?
Young drivers between 18 to 24 are considered inexperience and thus the car insurance will be more expensive.
How long you have been driving
The more driving experience you have, the better.
Previous driving record
It is more expensive if you are liable for accidents in the past. As mentioned before, the amount of car insurance you have to pay is based on your SF-Klasse.
Number of drivers
You will pay more if you want to insure more drivers.
How many kilometers you are going to drive
The more you plan to drive, the more it costs.
Where you park your car
It is safer to park in a garage than on the street. And your car insurance will also be less expensive.
The purpose of your car
The way you use your car (for private or business purpose) affects the insurance policy you need.
The type of your car
Big and powerful cars are more expensive to insure. Same for cars with a high value.
Besides, certain car models are involved in accidents more often than others. For example, I have heard that red car may cost more to insure. My guess is that maybe people who pick red cars are usually considered to be more aggressive drivers.
It is more expensive if you live in an urban area, or if your area has more accidents and crimes based on the statistics.
Depending on your region, your car insurance cost can be a few hundred Euros difference per year. You can put in your postal code here to get an idea of how expensive is your region.
The amount of deductible
The higher the deductible, the lower your car insurance cost will be.
Your insurance coverage
Comprehensive car insurance is more expensive than partial car insurance. Your car insurance will also cost more if you opt for more additional coverage.
13 ways to save money on your car insurance in Germany
1. Decide on your deductible (Selbstbeteiligung)
When you purchase a car insurance policy, you can decide on the amount of deductible. This is the amount you have to pay in case of accidents. For example, if you have a deductible of 300 Euros, and you have a car accident which causes a damage of 1,000 Euros, you will have to pay 300 Euros while the rest 700 Euros will be paid by your car insurance.
The higher deductible you choose, the lower your car insurance premium will be. Usually, it is recommended to have 150 Euros deductible for your partial car insurance and 300 – 500 Euros deductible for your comprehensive car insurance in Germany.
Usually, your premium will not be reduced too much more if you further increase your deductible after these amounts. In case you can afford to pay a higher deductible, you should compare the reduced premium price versus the increase of your deductible to decide if it is worth it.
2. Don’t overestimate your mileage
When you purchase your car insurance in Germany, you will have to specify how many kilometers per year you are going to drive. The more you drive, the more you will have to pay because the risk of having an accident will be higher.
If you underestimate your mileage and have an accident, your car insurance company may refuse to pay. Therefore, try to be as accurate as possible. If you overestimate your mileage, you will pay a higher premium than needed.
3. Drive less
As mentioned above, your mileage will affect your car insurance cost in Germany. So, if you minimize the use of your car, you can save some money on your car insurance. This is especially true for new drivers as they have to pay a high insurance premium.
Besides, if you own a monthly pass or BahnCard for public transportation, you may also get a lower price for your car insurance. The reason is that car insurance companies suppose that you will use public transportation often, which reduces your risk of car accidents.
4. Pay your premium annually
Depending on the insurance companies, you may choose to pay your premium monthly, quarterly, semi-annually, or annually. If you can, choose to pay your premium annually as it is usually cheaper (can be up to 5%).
5. Use second car insurance (Zweitwagenversicherung)
What is it?
Second car insurance means that you use the same insurance as your first car for your second car. If you use second car insurance, it is usually cheaper than if you would insure your second car with a new car insurance company.
If you insure your second car with a new car insurance company, you will normally start with SF 0 (the highest premium). That’s why you will be better off using the second car insurance to take advantage of your driving record with your first car. The higher SF-Klasse you have with your first car, the cheaper insurance cost will be for your second car.
It is attractive to new drivers
For new drivers, it can be very expensive to get car insurance in Germany because they have to start with SF-Klasse 0. What many German people do is that they get help from their parents.
For example, my German husband got his first car when he was 20. To avoid paying a very high premium, he bought his car under his father’s name and his father bought the second car insurance for this car. Since my father-in-law has his own car and has a good SF-Klasse, my husband paid a much cheaper premium than if he would get the car insurance by himself.
Your partner can also benefit by using second car insurance
As an expat, we won’t get this advantage as our parents are not in Germany. However, many car insurance companies in Germany offer a good discount to people who use second car insurance. Many also have good offers if the second car is driven by the insuree and his partner.
In our case, my husband now owns both our cars. He bought the second car insurance and put me as a second driver. Since my husband has a better SF-Klasse than me, we are paying a lower premium than if I would buy the car insurance by myself and start with SF 0 as I did not have much driving experience before.
6. Use a no-claim bonus (Schadenfreiheitsrabatte)
Ok, this one is more for German people, but I want to write about it in case you have family members in Germany. You can take over a no-claim bonus from your family members in Germany. Depending on the insurance companies, this may work between
- Parents and kids
- Grandparents and grandchildren
- Your partner
- Your siblings
- Parents-in-law and children-in-law
You can only do this when you already have a driving license in Germany. Let say, if your father-in-law decides to transfer his no-claim bonus to you because he doesn’t plan to drive anymore, you can get his no-claim bonus depending on how many years you have your driving license already.
If your father-in-law has SF 15 and you have a driving license for 3 years, you can only get SF 3 instead of SF 15 even though he gives up his bonus for you. Your father-in-law will then lose his SF-Klasse. This is especially interesting for young people who make their driving license early but only buy their cars some years later.
7. Think carefully before buying your car
The “Typklasse” of your car
Typklasse literally means type class. As mentioned before, the cost of car insurance in Germany depends also on the type of car. Big, powerful, and expensive cars will cost more. The higher the Typklasse, the more expensive the car insurance cost will be. The factor determining the Typklasse is how many damage and accident happen to a car model per year.
You can check this website to see the Typklasse for different car models. Buying a car with lower Typklasse will help you to save on car insurance costs in Germany.
The type of fuel
Choosing a diesel or gasoline car also has an impact on your car insurance cost. Your car insurance is usually cheaper if you use a gasoline car. However, with a diesel car, the fuel will cost less than a gasoline car.
If you need to drive a lot (over 20,000 kilometers per year), it makes sense to choose a diesel car to save on fuel costs. If not, you may be better off by buying a gasoline car as the insurance cost is cheaper.
Besides, if you have an energy-efficient car, which is using less fuel and causing less damage to the environment, it will also impact your car insurance price positively. For example, a hybrid or electric car.
New car vs used car
The car insurance is also cheaper for you if you buy a brand new car versus a used car. It is because new cars usually have no damage and the driver is supposed to drive more carefully.
8. Compare different offers
You should compare offers from different car insurance companies to find the best deal. The easiest way is to use a car insurance portal for the comparison.
Your car insurance company usually calculates a new tariff for you every year. So, it makes sense to keep looking for the best deal than just accepting your current offer. I have heard that many insurance companies are willing to give you a better tariff, if you ask for it or tell them about a counter-offer from their competitor.
Besides, you should let them know as well in case any situation changes that can help with the reduction of your tariff. For example, if you are going to drive less or if you are now parking your car in the garage instead of parking on the street.
9. Choice of vehicle repair shop
In some car insurance contracts, you are only allowed to use certain vehicle repair shops in their network. By doing so, you can get a discount of up to 20%. This is because car insurance companies have a partnership with these vehicle repair shops. Make sure you check that there is a vehicle repair shop near your area. Besides, the designated network should be big enough so that you can remain flexible when you need to repair your car.
For some other contacts, you are free to choose whatever vehicle repair shop. While this is more flexible for you, your car insurance will also be more expensive.
10. The parking location
It is more expensive if you park your car outside on the street at night. If the cost makes sense, you can think about renting a parking place in a garage as this will lower your car insurance premium.
11. Consider what features you need in your car insurance
It can be overwhelming to read about all the extra coverage from different car insurance. You should consider carefully if you need such extra coverage, or if you need the partial car insurance and comprehensive car insurance at all (especially if you have an old or cheap car). Removing unnecessary coverage and insurance can save you money per year.
12. Using a Rabattschutz or not
Rabattschutz literally means discount protection. Normally, when you have an accident that needs compensation from your car insurance, there will be a negative impact on your SF-Klasse. It can happen that your SF-Klasse is going down, meaning a higher premium in the future.
If you choose the Rabattschutz option, it can prevent the downgrading of your SF-Klasse even if you have an accident. However, you can probably guess already, it is more costly to include a Rabattschutz in your car insurance. Sometimes, due to the extra cost, it is better to risk worsening your SF-Klasse than to include a Rabattschutz option. You will have to consider carefully if it makes sense to have a Rabattschutz or not.
13. Get your driving record from your home country
If you have been driving in your home country, you should ask your previous car insurance company back home to issue you an official paper as proof for your good driving record. Many car insurance companies in Germany may accept it. If your car insurance company doesn’t accept it, try other companies as well. This works mostly within European countries. But it will not hurt to give it a try as this can help you to save hundreds of Euros a year.
Read more: Buying a House in Germany – As a Foreigner
Changing or canceling your car insurance policy in Germany
Why should you change your car insurance policy in Germany
The price of car insurance can change regularly and the fluctuation can be huge. It is not unusual to find a few hundred Euros difference between the cheapest and the most expensive policy. Many people switch their car insurance policies every year to get more attractive offers and save money. If you have been using the same car insurance company for years, it is almost guaranteed that you will find something cheaper by looking for a new car insurance policy.
Many people look for new car insurance when their contracts are up for renewal to achieve a lower price, or get better coverage. Some others change as they are not satisfied with the claim settlement after an accident and hope to get a better service from another company.
When can you change your car insurance policy in Germany?
For most car insurance in Germany, the insurance policy ends on 31 December. And you will need to cancel your policy one month in advance. Therefore, you should file your cancelation latest by 30 Nov. No reason for cancellation is needed.
Similar to any other subscriptions in Germany, your car insurance policy will automatically be extended for another year if you do not cancel it on time.
You may be allowed to change your car insurance throughout the year as well if certain factors apply. For example,
- If you have sold your car
- If you are not happy about the claim settlement after a car accident
- If the car insurance price goes up
Document needed to change your car insurance policy in Germany
To change your car insurance, you should check with the insurance company what document it will need. In general, the following document is required:
- Driving license
- Document for your current car insurance
- Bank data for payment
- BahnCard or monthly/yearly pass for public transportation (if any)
- Car registration document (Fahrzeugschein and Fahrzeugbrief)
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Which car insurance do you have in Germany? Do you have partial car insurance or comprehensive car insurance, or none of them? Leave a comment below and share your experience!
Moving to Germany or new in Germany? Check out our Support Page for all the resources you need!