A Complete Guide to Car Insurance in Germany

Introduction

Germany, known for its high-speed autobahns, engineering excellence, and strict legal regulations, has one of the most structured car insurance systems in Europe. Car insurance is legally mandatory in Germany, and every vehicle must be insured before it can be registered or driven on public roads. With a blend of compulsory and optional coverage types, understanding the system is essential for both locals and foreigners who intend to drive in Germany.

This comprehensive guide explores the types of car insurance in Germany, how the system works, what factors affect premiums, legal requirements, and useful tips for choosing the right policy.

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Overview of the German Car Insurance System

In Germany, car insurance is referred to as Kfz-Versicherung (short for Kraftfahrzeugversicherung), and it plays a crucial role in the country's road safety and compensation framework. The system is divided into two main segments:

1. Liability Insurance (Kfz-Haftpflichtversicherung) – Compulsory

2. Optional Insurance (Teilkasko and Vollkasko) – Comprehensive coverages

Before you register a vehicle in Germany, you must show proof of valid liability insurance by submitting an electronic insurance confirmation code, called an eVB-Nummer (Elektronische Versicherungsbestätigung).

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1. Liability Insurance (Kfz-Haftpflichtversicherung)

Legal Requirement

Third-party liability insurance is mandatory for all motor vehicles in Germany. It covers damages and injuries that you, as a driver, cause to other people, their vehicles, or property.

What It Covers

• Injuries to other drivers, passengers, pedestrians, or cyclists

• Property damage caused by your vehicle

• Legal expenses arising from such accidents

What It Does Not Cover

• Damage to your own vehicle

• Injuries to you (the at-fault driver)

• Theft, vandalism, or natural disasters

The minimum coverage limits are set by law and are quite generous compared to other countries:

• Personal injury: at least €7.5 million per injured person

• Property damage: at least €1.12 million per incident

• Financial loss: at least €50,000 per incident

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2. Partial Coverage Insurance (Teilkasko)

Teilkasko is an optional insurance type that provides coverage beyond third-party liability. It's often chosen by owners of older cars who want basic protection without full coverage costs.

What It Covers

• Theft of the vehicle

• Fire or explosion

• Glass breakage (e.g., windshield)

• Storms, hail, lightning, and floods

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

What It Does Not Cover

• Damage from collisions where you're at fault

• Vandalism

• Accidents caused by negligence

Teilkasko is a good middle-ground option for those who don’t want to pay for full coverage but still want protection from common risks.

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3. Comprehensive Insurance (Vollkasko)

Vollkasko is the most extensive car insurance policy in Germany. It includes all Teilkasko benefits and adds protection for damage to your own vehicle, even if you’re at fault.

What It Covers

• Everything in Teilkasko

• Damage to your own car caused by accidents (even if you’re responsible)

• Vandalism

• Hit-and-run damage

Ideal For:

• New or expensive vehicles

• Leased or financed cars (often required by the leasing company)

• Drivers who want full peace of mind

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Additional Optional Coverages

Some insurers in Germany offer add-ons such as:

• Roadside assistance (Schutzbrief): For towing, breakdown services, and emergency help.

• Legal protection insurance (Verkehrsrechtsschutz): Covers legal fees in traffic-related disputes.

• No-claims bonus protection: Prevents your premium from increasing after your first claim.

• Gap insurance: Covers the difference between your car’s current value and its original value (important for new cars or financed vehicles).

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How Car Insurance Premiums Are Calculated

Premiums in Germany are not fixed. Insurance companies consider multiple variables when calculating your rate:

1. Vehicle-Related Factors

• Make and model of the car

• Power and engine size

• Safety features

• Theft risk

• Insurance Type Classes (Typklassen): Cars are assigned risk categories based on accident statistics.

2. Personal Factors

• Age and gender of the driver

• Driving experience and accident history

• Years of holding a license

• Profession

3. Usage-Based Factors

• Annual mileage

• Where the car is parked (garage or street)

• Area of residence (based on regional accident statistics)

4. No-Claims Bonus (Schadenfreiheitsklasse)

Germany uses a bonus-malus system where premiums are discounted each year you go without making a claim. These are known as Schadenfreiheitsklassen (SF classes). The longer you drive claim-free, the lower your premium.

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Registering a Vehicle: The Insurance Code (eVB-Nummer)

Before registering a car in Germany, you must obtain an eVB number from your insurance provider. This electronic code verifies that your car is insured.

Steps to register a car:

1. Obtain the eVB number from your insurer.

2. Visit the local vehicle registration office (Kfz-Zulassungsstelle).

3. Submit the required documents, including ID, proof of address, and vehicle details.

4. Receive your registration certificate and license plates.

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Insurance for Foreign Drivers and Expats

Foreign residents in Germany can use their international or EU driver’s license for a limited time (usually six months). If you plan to stay longer, you may need to exchange your license for a German one.

If you import a car into Germany or purchase one locally, you’ll need to:

• Insure it with a German provider

• Obtain an eVB number

• Register the vehicle

International insurers are not recognized for registration purposes. However, travelers with a green card (international insurance certificate) can drive for short periods.

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Switching Insurance Providers

Drivers in Germany can switch their insurance provider once a year, usually at the end of the calendar year. You must cancel your old policy by November 30 if you want a new one starting in January.

You may also switch mid-year if:

• Your premium increases without a change in coverage

• You buy a new car

• Your vehicle is written off or sold

Compare providers carefully, as premiums and services can vary significantly.

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Cost of Car Insurance in Germany

Car insurance costs can range widely, depending on your risk profile, type of car, and level of coverage. Here’s a general estimate:

• Liability only: €250–€600 per year

• Teilkasko: €400–€800 per year

• Vollkasko: €600–€1,500+ per year

Premiums can be reduced by:

• Increasing your deductible (Selbstbeteiligung)

• Bundling with other policies (like home insurance)

• Installing safety devices

• Avoiding high-risk vehicle types

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Penalties for Driving Without Insurance

Driving without liability insurance in Germany is a criminal offense. Penalties include:

• Heavy fines

• License suspension

• Vehicle impoundment

• Potential imprisonment for repeat offenses

You are also financially liable for any damage or injury you cause while uninsured.

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Conclusion

Car insurance in Germany is an essential legal and financial requirement. The country’s system is robust, well-regulated, and designed to provide protection for both drivers and third parties. Understanding the different types of insurance—liability, partial, and comprehensive—is crucial when deciding the level of coverage you need.

Whether you're a German citizen, a long-term resident, or an expat, having the right car insurance is key to staying compliant with the law and ensuring peace of mind while on the road. By comparing policies, understanding the risk factors, and using available discounts, you can find the most suitable and affordable insurance for your vehicle.