Types Of Car Insurance In Germany

Types of car insurance in Germany

There are three main types of German car insurance: third party, partial cover and comprehensive.

Third party (haftpflicht)

This is the minimum level of coverage required for drivers in Germany. It covers damage to other vehicles in the event of an accident, including medical costs. However, it doesn’t cover any of your own costs.

Partial cover (teilkasko)

Teilkasko covers everything included in third party coverage plus some costs related to damage to your own vehicle, including theft plus fire and storm damage. However, it does not cover vandalism or any costs relating to accidents that are your fault.

Comprehensive (vollkasko)

As suggested by its name, this covers full costs including damage to your own and other vehicles in incidents that are your fault. Some vollkasko policies also cover additional costs such as those relating to disability and death resulting from the accident.

Because of the breadth of coverage, this policy is the most expensive type. Some dealerships for new cars insist on this as a minimum level policy.

Car insurance costs in Germany

As in other places, car insurance costs in Germany are based on a number of different factors including:

driver age;
driver experience and record;
vehicle value;
number of drivers insured;
location (costs for bigger cities are usually more expensive);
vehicle use (including purpose of use and how frequently you will drive)

You can reduce your annual premiums in various ways, including paying a higher excess/deductible (the amount you pay towards any claim), paying the annual amount in full, or reactivating your no claims bonus.

Because of the various factors involved in cost calculation, insurance premiums in Germany can vary rapidly from around €100 a year for third party coverage for cheaper or second-hand vehicles to over €1,000 a year for comprehensive coverage on top-range models.

Additional forms of car insurance in Germany

You can take out optional extra forms of car insurance in Germany. Most insurance companies will offer various add-ons including:

Breakdown insurance – this covers the costs of your car being towed away in the event of a roadside breakdown. It also sometimes includes replacement vehicle costs and the costs of transporting ill or injured people.
Legal insurance – covers legal expenses in the event of an incident that goes to court.
Additional equipment coverage – if you carry or store expensive equipment in your vehicle, you can cover the costs of damage or theft if you pay a higher premium.
Extended elementary damage – if you live or travel near mountainous areas, you may need this to protect against the risk of damage due to avalanches or extreme snowfall.

Car insurance bonuses and penalties in Germany

Germany has a no claims bonus system (schadenfreiheitsklasse) which entitles drivers who have gone a year or more without making any claim to a discount on their annual premium.

Exact discounts can vary between insurers but as a rough guide you will be entitled to:

up to 35% off annual costs if one year without making a claim;
around 45% off if 3 years without making a claim;
approx. 50% off if 5 years without making a claim;
up to 80% off if 15+ years without making a claim

You can often carry over no claims periods from other insurance companies, including companies from abroad. If you are moving to Germany from overseas and want to transfer a no claims bonus, it is a good idea to request a letter from your previous insurer attesting to your no claims period.

Companies also often penalize drivers with a poor driving record. Expect to pay an increased premium if you:

are a young or inexperienced driver;
have been in an accident where you were at fault;
have any points on your license for violations such as speeding or drink driving.