Car Insurance in Germany: A Complete Guide for Drivers and Expats

Germany, renowned for its efficient transport infrastructure and legendary autobahns, requires all drivers to adhere to strict road safety and insurance regulations. If you live in Germany or plan to drive there, understanding the car insurance system is essential. This comprehensive guide explores everything you need to know about car insurance in Germany, from the types of coverage available to how to choose the best provider and save money.

1. The Legal Requirement: Is Car Insurance Mandatory in Germany?

Yes. Car insurance is mandatory in Germany, and it is illegal to drive a vehicle without at least basic coverage. Before registering a car, you must provide proof of insurance, known as an eVB-Nummer (electronic insurance confirmation number). Without this, you cannot legally operate or register a vehicle.

The minimum required insurance is liability insurance (Kfz-Haftpflichtversicherung), which covers damages you cause to others. Driving without insurance can lead to heavy fines, license suspension, or even imprisonment in severe cases.

2. Types of Car Insurance in Germany

German car insurance comes in three main types, offering different levels of protection:

a) Liability Insurance (Haftpflichtversicherung)

This is the minimum legal requirement and covers:

• Damage to other vehicles

• Injury to other drivers, passengers, or pedestrians

• Property damage caused by your car

However, it does not cover damage to your own vehicle. Every car on the road must have this insurance.

b) Partial Coverage (Teilkasko)

This is optional and includes all liability benefits, plus:

• Theft and burglary

• Fire and explosions

• Natural disasters (storms, hail, floods)

• Broken glass (e.g., windshields)

• Damage caused by animals (e.g., marten bites)

Teilkasko is suitable for vehicles that are older but still valuable enough to warrant protection beyond liability.

c) Comprehensive Insurance (Vollkasko)

This includes all the above and adds:

• Damage to your own car due to an accident (even if you’re at fault)

• Vandalism

• Hit-and-run accidents

Vollkasko is typically recommended for new or high-value cars and leased vehicles. It offers the highest level of protection and peace of mind.

3. Cost of Car Insurance in Germany

Car insurance premiums in Germany depend on several factors:

• Type of car (make, model, age, engine size)

• Driver profile (age, driving history, accident record)

• Region (urban areas usually have higher rates)

• No-claims bonus (Schadenfreiheitsklasse) – the longer you drive without claiming, the lower your premium

• Annual mileage

• Type of coverage (liability vs. comprehensive)

Approximate Annual Costs:

• Liability insurance: €250 – €600/year

• Teilkasko: €400 – €800/year

• Vollkasko: €700 – €1,200/year

Prices vary significantly, so comparing offers is crucial.

4. The No-Claims Bonus System (Schadenfreiheitsrabatt)

This system rewards careful drivers. Each claim-free year moves you to a higher bonus class, which reduces your premiums. However, if you file a claim, your class may drop, leading to higher costs in subsequent years.

For example:

• After 5 years without a claim, you might receive a 40–50% discount.

• After 10+ years, discounts can exceed 70%.

Some insurers allow transferring no-claims bonuses from another EU country or even from a family member in some cases.

5. Additional Coverage Options

Besides the core types, German insurers often offer optional add-ons:

• Legal protection insurance (Rechtsschutz): Covers legal expenses in traffic disputes

• Roadside assistance (Schutzbrief): Towing, breakdown service, or emergency help

• Gap insurance (GAP-Deckung): Covers the difference between the replacement value and what you still owe if your leased or financed car is totaled

• Personal accident insurance: Covers medical costs or compensation in case of injury or death

6. How to Choose the Right Car Insurance in Germany

Choosing insurance can be overwhelming due to the number of providers. Consider the following steps:

a) Compare Online

Use comparison websites like:

• Check24.de

• Verivox.de

• Toptarif.de

These platforms allow you to input your details and receive quotes from dozens of providers.

b) Look at Reviews

Customer service, claim handling, and transparency vary between insurers. Reading reviews or asking in expat forums can help you choose a reputable company.

c) Understand the Terms

Pay attention to:

• Deductibles (Selbstbeteiligung)

• Limitations on drivers (e.g., named drivers only)

• Cancellation policies

d) Language Options

If you don’t speak fluent German, choose an insurer with English-speaking support or one that offers contracts in English.

7. Registering a Car and Getting Insurance

To register a car in Germany, you need:

1. Proof of ownership (Fahrzeugschein)

2. A valid TÜV certificate (technical inspection)

3. Personal ID or residence registration (Meldebescheinigung)

4. EVB number from your insurer

Once registered, you’ll receive your license plate and registration documents. Insurance takes effect immediately after registration.

8. Cancelling and Switching Insurance

You can cancel your car insurance under specific conditions:

• Annual cancellation: Notify by November 30 for contracts ending December 31

• Premium increase: Cancel within 4 weeks of notification

• Vehicle sale or deregistration: Cancel anytime with proof

To switch providers, obtain a new eVB number and inform both the new and old insurer. The process is relatively simple and can save money if you find a better deal.

9. Car Insurance for Expats and Foreign Drivers

Expats face some unique challenges:

• Driving license recognition: Non-EU licenses may need to be converted within 6–12 months

• Credit history: May affect your insurance application

• No-claims bonuses: Might not be recognized unless documented and accepted by the German insurer

Some companies are more expat-friendly and experienced with international documents. It’s advisable to work with a broker or agent who speaks English and understands your background.

10. Tips to Save on Car Insurance in Germany

• Increase deductible: A higher Selbstbeteiligung can lower premiums

• Limit driver list: Insure only specific drivers, especially over 25

• Pay annually: Annual payments often come with discounts

• Garage parking: Can reduce theft risk and lower premiums

• Combine policies: Bundle with home or liability insurance for better rates

Conclusion

Car insurance in Germany is a well-regulated, essential part of car ownership and driving. With a bit of research and comparison, drivers can find affordable, comprehensive coverage tailored to their needs. Whether you're a local or an expat, understanding the system helps you stay legal, protected, and financially savvy on German roads.