Car Insurance in Germany: A Complete Guide to Coverage, Laws, and Costs

Germany, home to some of the world’s most iconic automobile manufacturers and the legendary Autobahn, has one of the most developed and highly regulated car insurance systems in Europe. Driving in Germany requires more than just a valid license and vehicle registration—it also demands proper car insurance that meets strict legal standards.

Whether you are a resident, an expatriate, or a temporary visitor looking to drive in Germany, understanding the country’s car insurance system is essential for legal compliance and financial protection. This article provides an in-depth look at the types of car insurance in Germany, mandatory requirements, coverage options, cost factors, claims process, and more.

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The Legal Framework: Is Car Insurance Mandatory in Germany?

Yes. Car insurance is mandatory in Germany, and it is impossible to register a vehicle without it. The government enforces a minimum liability insurance requirement, known as Kfz-Haftpflichtversicherung (motor vehicle liability insurance), which every vehicle owner must have.

This mandatory insurance:

• Covers damages or injuries caused to third parties

• Is a prerequisite for receiving a license plate and operating a vehicle

• Must be kept active at all times as long as the vehicle is registered

Failure to maintain valid insurance is a serious offense and can lead to penalties such as fines, vehicle impoundment, or legal action.

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Types of Car Insurance in Germany

Car insurance in Germany is divided into three main types. While only liability insurance is legally required, many drivers choose additional protection for greater financial security.

1. Liability Insurance (Kfz-Haftpflichtversicherung) – Mandatory

This is the minimum legal coverage every vehicle must have. It covers:

• Personal injury to other parties

• Property damage to other vehicles or structures

• Financial losses caused to third parties

However, it does not cover damage to your own vehicle or injuries to you as the policyholder.

The coverage amounts are typically:

• At least €7.5 million for personal injury

• €1.12 million for property damage

• €50,000 for financial loss

Most insurers offer higher limits for better protection.

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2. Partial Coverage (Teilkasko) – Optional

Teilkasko is an upgrade from basic liability insurance and provides coverage for specific damages to your own vehicle. It includes:

• Theft (vehicle or parts)

• Fire and explosions

• Storm, hail, lightning, and flooding

• Broken windows and windshields

• Damage caused by animals (especially wild animals)

It does not cover vandalism or accidents you cause yourself. Partial coverage is popular for used or lower-value vehicles where full coverage may not be financially justifiable.

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3. Comprehensive Coverage (Vollkasko) – Optional

Vollkasko includes everything in Teilkasko plus:

• Damage to your own car in an accident (even if you caused it)

• Vandalism or malicious damage

• Hit-and-run incidents

This insurance is highly recommended for:

• New or high-value vehicles

• Leased or financed vehicles (often required by lenders)

• Inexperienced drivers who want maximum protection

Comprehensive insurance gives the most extensive protection, but it also comes with higher premiums.

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What Affects the Cost of Car Insurance in Germany?

Car insurance premiums in Germany are calculated based on a wide range of factors. These include:

1. Vehicle Type (Typklasse)

Each vehicle model is assigned a risk class based on its accident history and repair costs. High-performance or luxury cars tend to have higher premiums.

2. Region (Regionalklasse)

Where you live matters. Urban areas with high traffic density usually have higher rates than rural areas with fewer accidents or thefts.

3. Driving Experience

Young drivers or those with less experience generally pay more due to a higher statistical likelihood of accidents.

4. Damage-Free Years (Schadenfreiheitsklasse - SF)

The longer you drive without filing a claim, the higher your SF class and the lower your premium. Safe driving is rewarded.

5. Annual Mileage

Insurers ask how many kilometers you drive per year. The more you drive, the higher the risk.

6. Parking Location

Vehicles parked in a secure garage at night are considered less risky than those parked on the street.

7. Purpose of Use

Personal use, business use, or commuting all have different risk profiles and can affect premiums.

8. Deductibles (Selbstbeteiligung)

Choosing a higher deductible (amount you pay out-of-pocket in a claim) lowers your monthly premium.

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How to Choose a Car Insurance Provider

Germany has a competitive insurance market, and choosing the right provider depends on your specific needs. Some well-known car insurance companies include:

• Allianz

• AXA

• HUK-Coburg

• DEVK

• R+V Versicherung

• ERGO

Before choosing a provider, consider:

• What is covered under the policy

• Premium costs vs. deductible

• Customer service reputation

• Availability of online tools or mobile apps

• Multilingual support (especially for expats)

Many insurance companies offer online comparison tools to help customers evaluate prices and services side by side.

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Registration Process: Proof of Insurance Required

Before you can register a car in Germany, you need a confirmation code (eVB-Nummer) from your insurance company. This electronic insurance confirmation number proves that you have liability coverage in place.

Steps:

1. Choose your insurance provider.

2. Receive your eVB number.

3. Present it at the local vehicle registration office (Zulassungsstelle).

4. Complete the registration and receive your license plates.

The process is fast and digital, but all details must match exactly (name, address, car data, etc.).

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Filing a Claim: The Claims Process

In case of an accident or damage, the claim process typically involves:

1. Immediate Action

   • Ensure safety and call emergency services if needed.

   • Document the incident with photos and a written accident report.

   • Exchange information with the other party (name, plate number, insurance).

2. Notify Your Insurance Provider

   • Contact your insurer as soon as possible (within days).

   • Provide all documentation (police reports, repair estimates, etc.).

3. Assessment and Repair

   • The insurer may send an appraiser for high-value claims.

   • Approved garages or workshops handle repairs.

4. Payment or Reimbursement

   • Depending on coverage and fault, costs will be covered by liability, partial, or comprehensive insurance.

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Car Insurance for Expats and Foreign Drivers

Foreigners living in Germany are required to purchase car insurance just like residents. Here are some considerations:

• International driver’s licenses are valid for six months, after which a German license may be required.

• If importing a vehicle, it must be registered and insured in Germany.

• Some insurers offer services in English and policies tailored to expats.

• Driving history from your home country may not count toward your SF class unless your insurer agrees to recognize it.

It's wise for newcomers to consult with brokers or insurers who specialize in expat needs.

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Special Situations

Rental Cars

Rental vehicles in Germany typically include basic liability insurance. Optional collision damage waivers (CDW) and theft protection can be purchased for extra coverage.

Leased and Financed Cars

These vehicles almost always require Vollkasko coverage to protect the value of the asset during the lease or loan term.

Classic Cars (Oldtimers)

Special insurance policies are available for vintage and collector vehicles, often at reduced rates due to limited use.

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Conclusion

Car insurance in Germany is not just a formality—it is a legal requirement and an essential layer of protection for drivers and society. With a highly structured and regulated insurance market, drivers can tailor their coverage to match their needs, budgets, and lifestyles.