Car Insurance in Germany: Everything You Need to Know

Germany is known for its efficient road network, world-class automotive engineering, and the famous Autobahn with its unrestricted speed zones. With such a strong car culture, car insurance in Germany is not only essential — it’s legally required. Whether you're a resident, expatriate, or just moved to Germany, understanding how car insurance works here is crucial. In this article, we will provide a comprehensive guide to car insurance in Germany, including types of coverage, legal requirements, costs, and how to choose the right policy.

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1. Legal Requirements for Car Insurance in Germany

In Germany, car insurance is mandatory. The law requires every vehicle that is driven or parked on public roads to have at least a third-party liability insurance (Haftpflichtversicherung). Without this, you cannot register your vehicle or legally drive it.

Why Is It Mandatory?

The purpose of mandatory liability insurance is to protect others from damages caused by your vehicle. If you're involved in an accident that results in injury, death, or property damage, this insurance ensures the affected parties are compensated, even if you cannot afford to pay.

What Happens if You Don’t Have Insurance?

Driving without car insurance in Germany is considered a criminal offense. It can lead to heavy fines, a driving ban, or even imprisonment in serious cases. Additionally, your car can be impounded.

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2. Types of Car Insurance in Germany

There are three main types of car insurance in Germany:

a) Third-Party Liability Insurance (Haftpflichtversicherung)

This is the minimum required by law and covers:

• Bodily injury to other people

• Damage to other vehicles or property

• Legal costs related to a claim

It does NOT cover damage to your own vehicle, no matter who is at fault.

b) Partial Coverage Insurance (Teilkasko)

This is an optional add-on and includes:

• Theft or attempted theft

• Fire or explosion

• Natural disasters (flood, storm, hail)

• Broken glass (windows, mirrors)

• Animal collisions (especially deer or wild boar)

• Vandalism in some cases

It’s a good compromise between cost and coverage, especially for cars that are a few years old.

c) Fully Comprehensive Insurance (Vollkasko)

This is the most extensive and expensive type of insurance. It includes everything in Teilkasko plus:

• Damage to your own vehicle, even if the accident is your fault

• Damage from hit-and-run drivers

• Vandalism

• Coverage for at-fault accidents

Vollkasko is highly recommended for new or high-value cars or if you're financing or leasing your vehicle.

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3. What Affects the Cost of Car Insurance?

Several factors influence how much you’ll pay for car insurance in Germany:

a) Type and Value of the Vehicle

Luxury or high-performance cars cost more to insure. Insurance companies categorize cars into risk groups based on accident statistics, theft rates, and repair costs.

b) Driving History (SF-Klasse or Schadenfreiheitsklasse)

This system rewards safe driving. The longer you drive without an accident, the higher your no-claims bonus and the lower your premium.

If you’re a new driver or new to Germany, you'll usually start at a higher class (SF 0 or SF ½), meaning higher premiums.

c) Age and Experience of the Driver

Young and inexperienced drivers typically pay more. Drivers under 25 or without several years of experience are considered higher risk.

d) Annual Mileage

The more you drive, the higher your risk of being in an accident. Estimating your yearly mileage accurately is important.

e) Location

Urban areas with more traffic and higher accident/theft rates have higher premiums. Living in a small town may reduce your insurance costs.

f) Garage or Parking Situation

Cars parked in a locked garage are less likely to be stolen or damaged, which may reduce your premium.

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4. How to Choose a Car Insurance Provider in Germany

Germany has a competitive insurance market with numerous companies and comparison tools. Here are tips for choosing the best policy:

a) Use Comparison Websites

Websites like Check24, Verivox, and Tarifcheck allow you to compare policies side-by-side based on coverage, cost, and benefits.

b) Understand the Fine Print

Make sure you read and understand what is included and excluded. Look out for:

• Deductibles (Selbstbeteiligung)

• Replacement car while yours is being repaired

• Claims handling in English (if you’re not fluent in German)

• Customer service availability

c) Consider English-Speaking Providers

Some insurers specialize in serving expats or international residents, offering policies and support in English. Examples include Feather Insurance, Getsafe, and Allianz Global Assistance.

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5. Car Registration and Proof of Insurance

Before you can register a car in Germany (Zulassung), you need an eVB number (elektronische Versicherungsbestätigung). This is an electronic code issued by your insurance provider that proves you have valid insurance.

At the registration office (Zulassungsstelle), this number is entered into their system to verify your insurance. Without it, you cannot get license plates or legally drive.

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6. Can You Transfer Your No-Claims Bonus from Abroad?

In some cases, yes. Some German insurers accept a no-claims history from other EU countries, the UK, or even overseas (like the US or Canada), but it depends on the provider.

You’ll usually need to provide:

• A letter from your former insurance provider

• A translation (if not in German or English)

• Proof of no claims over a certain period

This can significantly reduce your premiums, so it's worth asking.

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7. What to Do in Case of an Accident

If you're involved in an accident in Germany:

1. Ensure safety – turn on your hazard lights and set up the warning triangle.

2. Call emergency services (112) if there are injuries.

3. Take pictures and document the scene.

4. Exchange information – names, addresses, insurance details, license plates.

5. Contact your insurance company to report the accident as soon as possible.

For minor accidents without injuries, the police may not respond, so proper documentation is essential.

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8. Switching Car Insurance Providers

You can switch your car insurance provider in Germany, typically once a year. The main switching period is:

• November 30th – this is the usual deadline to cancel your current policy for the following year.

Other reasons to switch may include:

• Change of car

• Change in usage (e.g., more or less mileage)

• Unjustified premium increases

Always check cancellation periods in your policy.

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9. Tips for Saving Money on Car Insurance

• Bundle your insurance (some providers offer discounts for home and car policies)

• Increase your deductible

• Drive a car in a lower insurance risk class

• Maintain a clean driving record

• Choose annual payments instead of monthly (cheaper overall)

• Compare policies regularly

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Conclusion

Car insurance in Germany is a well-structured but complex system with a variety of options and factors influencing the cost. Whether you're a new resident or a seasoned driver, understanding the differences between Haftpflicht, Teilkasko, and Vollkasko can help you make informed choices and stay legally compliant. By comparing policies and paying attention to discounts and risk factors, you can find affordable and comprehensive coverage that meets your needs.

If you're moving to Germany or buying your first car there, take the time to research and choose wisely — after all, good insurance is not just a legal obligation, but a smart way to protect yourself and others on the road.