Car Insurance GermanyNovember 17, 2023 2023-11-17 10:29
Car Insurance Germany
Car Insurance Germany
Similar to health insurance, car insurance is mandated in Germany, so everyone who drives a vehicle must have it insured. You cannot register your car as a long-term resident of Germany without first obtaining auto insurance, which will prevent you from using it for driving. However, this is merely one of the reasons why drivers in Germany must have auto insurance. There are many advantages to having auto insurance for both your car and your financial security.
In Germany, there are many different kinds of auto insurance policies to pick from, as well as a large number of auto insurance providers. People are free to select the kind of auto insurance coverage that best fits their needs and the needs and features of their vehicle.
Why Do I Need Car Insurance in Germany?
Whether you are a young driver or an experienced one, getting car insurance is mandatory and highly advised in Germany. Although you might never cause an accident, in case that at some point in time you do, without car insurance, you will be responsible for the total financial cost of the damage you cause. Considering car insurance is mandatory in many countries, including Germany, you will also face legal issues for not having a vehicle insurance policy.
Types of Car Insurance in Germany
As a longterm resident in Germany wishing to insure your vehicle, you will find there are three main levels of car insurance. Essentially, it all comes down to the level of coverage you are interested in since each of them offers varying levels of coverage. Considering that the car insurance market in Germany is rather large and competitive, it would only be fair to do your research properly and see the offers that best suit your needs.
Here are the three main types of car insurance in Germany:
1. Liability Insurance (Haftpflicht)
Liability car insurance, also known as third-party insurance, is the minimum legal requirement or the most basic type of car insurance. This type of car insurance policy has a minimum coverage level, specifically, it only covers any damage that you or your car might cause on other people or cars, including the medical expenses. The downside is that it does not cover the damage you have done to your own car (when you are the one responsible for the accident). This is the reason individuals typically ask for one of the two other levels of car insurance mentioned below.
2. Partial Insurance (Teilkasko)
Partial car insurance in Germany is a combination of both, liability insurance as well as some extra coverage, protecting individuals in instances of damage (caused by natural disasters such as earthquakes or floods), fire, as well as theft (excluding vandalism). In addition to the aforementioned, a partial car insurance policy will also cover broken glass, wiring damages, as well as damages caused by Marten (weasel) bites. Considering this insurance policy has a vaster coverage level than liability insurance, it is also more expensive in terms of cost.
3. Comprehensive Insurance (Vollkasko)
Comprehensive car insurance in Germany is the type of vehicle insurance that covers largely anything there is to cover. It is the most substantial level of insurance, and it includes both liability as well as partial insurance, and more (such as acts of vandalism). This type of vehicle insurance covers damages done to your own car, through an accident inflected by yourself. Considering this type of car insurance is the most comprehensive, it is also the most expensive. You will be required to pay more to keep your vehicle insured, but in case of damages, you will pay less.
Cost of Car Insurance in Germany
The cost of car insurance in Germany depends on a variety of characteristics, related to both the driver and the vehicle. In Germany, the price of car insurance depends on the experience and age of a driver, the location, as well as the engine size and overall value of the vehicle. Generally, the cost of car insurance largely depends on your deductible (the amount you pay out of pocket before the insurance company covers the expenses). E.g: if you have a 300€ deductible, and the damages total 1000€, you will pay 300€, while the insurance company will cover 700€.
For partial insurance (Teilkasko) the deductible amount is usually 150€, while for comprehensive insurance (Vollkasko) drivers generally pay somewhere between 300€-500€. How much you pay for car insurance in Germany also depends on your age. You will likely be required to pay more if you are a young driver, considering young drivers tend to have the most traffic incidents. Comprehensive insurance is highly advised, especially for young vehicles, while older vehicles can do well with partial insurance, which is less expensive than the former. Liability insurance is the cheapest car insurance type in Germany.
A few factors that impact the cost of car insurance in Germany include:
- Car model. The car model you drive has a say on how much you pay for car insurance in Germany. Specifically, if you drive a car that tends to cause little damage and less in repair costs, you will be required to pay less in premiums.
- Contribution payment. It is largely advisable to pay the car insurance cost annually rather than in monthly/quarterly instalments. Studies suggest that you tend to pay less if you transfer the entire amount at once, in comparison to several times a year.
- Mileage. When you get your car insurance policy, you will be required to specify the number of kilometres you tend to drive. If you do not drive as much, specify a reasonable number instead of overestimating. The more you specify in kilometres, the more you will have to pay.
- Claims. If you are a good driver and have little to no claims, you will usually pay less for car insurance. E.g., German companies give all drivers a no-claims class (Schadenfreiheitsklasse), that gets higher with every year you make no claims, reducing the cost by a certain percentage.
- Location. If you live in any of the bigger cities, you will likely have to pay more for car insurance, compared to smaller cities or towns.
Tips on Car Insurance in Germany
Before deciding on which car insurance policy you want to purchase, make sure to shop around and find the offers that comply with your needs and finances. Find a few tips on purchasing car insurance in Germany in the sections below:
Combine Car Insurance Policies
It is advised that in case you have two or more vehicles, you insure them with the same car insurance company. You may also have the option of combining your car insurance with your liability insurance or your home contents insurance. If your parents are longterm residents in Germany, they can get insurance for your car, by registering it as their second vehicle, while you are registered as a alternate driver. Additionally, some companies in Germany also offer family tariff, by offering discounts to the children of customers.
Higher Deductible, Cheaper Insurance
Higher deductibles means you will be paying less in premiums. According to Finanztip, a deductible of 300€ will save you an average of 25%, while a self-contribution of 150€, will save you approximately 18% in premiums.
Stay Updated With Costs
Before you get car insurance, but even after you do, it is important to stay up to date with costs. Different companies will offer different costs, so shopping around should always be an option before deciding on a car insurance company. Compare car insurance prices and choose the one cheapest to you. You have the freedom to do so, considering your car insurance will be renewed every year, and you typically have time until November to cancel it.
Frequently Asked Questions
1. What Is an eVB Number?
This number is important if you want to register your car in Germany and it is issued to you by your car insurance provider, typically by means of email. You will have to provide this number when you register your vehicle, along with other necessary documents such as your TÜV certificate and vehicle tax. Your eVB number will notify the registration office that the vehicle is insured.
2. How to Get Car Insurance in Germany?
In order to purchase car insurance in Germany, you will be asked to provide the following documents:
- Personal ID
- German driving license number.
- Driving history (relevant information).
- German bank account details.
- Vehicle purchase documentation (in certain companies).
3. Can I Get Car Insurance in Germany Online?
Some companies offer the possibility of getting car insurance in Germany online. You should be able to provide personal details such as your German bank account and driving licence. After purchasing car insurance online in Germany, you should receive your insurance details by email, in the following 24 hours, including your eVB insurance number, insurance information, and statement form needed in the event of an accident.
4. Do I Need Rental Car Insurance in Germany?
Yes, as a driver renting a vehicle in Germany, you are required to have car insurance, even if the vehicle in rented. Sometimes, your existing car insurance will be valid and extend its damage coverage to the rental vehicle. Keep in mind that third party liability and fire insurance are required in all rental vehicles in Germany, and many rental companies in Germany already include the cost of insurance when renting a car (and often provide additional coverage, if you are interested). This means liability insurane is generally already included when renting a car in Germany.
The rental company will inform you whether you already have insurance when renting a car in Germany.
5. Which Is the Cheapest Car Insurance in Germany?
Car insurance premiums depend on several factors such as age, car model, claims, location, as well as milage, among others. So, the cheapest car insurance in Germany for you might not be as cheap for other people. As a young driver, car insurance will not be as cheap as if would be if you were an experienced driver. The same is when you purchase a newer car model. In terms of price, liability insurance (third-party insurance) is the cheapest form of car insurance in Germany but it also is the least extensive insurance in terms of coverage.
6. Is Car Insurance in Germany Valid for International Travel?
Car insurance in Germany can be valid for internaitonal travel, if you are travelling within the EU member countries. You must obtain third party liability insurance, considering this insurance is mandatory in all EU countries. You can also take additional coverage, covering other risks and damages, such as the other types of car insurance mentioned above, partial insurance (Teilkasko) or comprehensive insurance (Vollkasko).
If you want to drive outside of the EU member states, you will need to obtain a Green Card. You can request this type of document from your car insurance company in Germany, and it is usually free of charge. In the Green Card, you will be able to find a list of countries where your car insurance is still valid. Certain countries outside of the Green Card requirement will ask that you purchase car insurance at the border.
7. What Is Schadenfreiheitsklasse?
Bluntly translated to ‘no-claims class’, Schadenfreiheitsklasse is a class offered to all drivers, which keeps track of their insurance claims. An insurance claim is the formal request that the policyholder (driver) sends to the car insurance company to inquire coverage or compensation for a covered damage. Through ‘schadenfreiheitsklasse’, insurance companies keep track of your claims, and the less claims you have, the more you earn in discount percentage.
For example, if you go 2 years without making a claim, you will receive approximately a 15% discount in insurance premiums. If you go 3 years without a claim, you will receive somewhere around 30% discount. The discount increases the more years you go without making a claim. You can transfer these no-claim periods from car insurance companies from abroad as well, simply notify both companies that you want to transfer your information.
8. Can I Cancel a Car Insurance Contract in Germany?
Many German car insurance companies will renew your contract automatically, so you will have to give at least a month’s notice before cancelling your contract. An early termination of the contract, however, can only be done in certain circumstances, such as when the company increases premiums without a one month notice or when you are not satisfied with the handling of claims (you need to provide written details).