Car Insurance in Germany: Everything You Need to Know
Germany, the land of the Autobahn and engineering excellence, is famous for its automotive culture. With some of the most well-maintained roads in the world and a population that deeply values precision and efficiency, it comes as no surprise that Germany has one of the most structured and regulated vehicle insurance systems globally.
Whether you are a German resident, a newly arrived expat, or an international student planning to drive in Germany, understanding the ins and outs of German car insurance is essential. This guide will provide an in-depth look into how car insurance works in Germany, what coverage is available, how much it costs, and how to choose the best policy for your needs.
1. Is Car Insurance Mandatory in Germany?
Yes, car insurance is legally required in Germany. In fact, you cannot register or drive a car without proof of insurance. All car owners must have at least third-party liability insurance, known in German as Haftpflichtversicherung.
If you drive without insurance, you risk legal consequences such as fines, points on your license, and even imprisonment in severe cases. This is why car insurance is an integral part of vehicle ownership in Germany.
2. Types of Car Insurance in Germany
There are three primary types of car insurance in Germany. Each type offers a different level of coverage and is suitable for different types of drivers and vehicles.
2.1 Third-Party Liability Insurance (Haftpflichtversicherung)
This is the minimum legal requirement for any vehicle registered in Germany. It covers:
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Personal injury to others
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Property damage caused to third parties
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Legal costs in case of a lawsuit
This insurance does not cover damages to your own vehicle. It is designed to protect other people and property from any harm you cause while driving.
2.2 Partial Coverage Insurance (Teilkasko)
This is optional but highly recommended. It includes all the benefits of third-party liability and also covers:
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Theft
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Fire
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Natural disasters (e.g., hail, storm, flooding)
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Broken glass (including windshields)
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Damage caused by animals (e.g., rodents chewing wires)
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Vandalism in some cases
Teilkasko is popular for vehicles that are a few years old but still valuable enough to protect against common risks.
2.3 Comprehensive Insurance (Vollkasko)
This is the most extensive form of car insurance and includes everything covered by third-party and partial coverage, plus:
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Damage to your own car in an accident (even if you are at fault)
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Vandalism
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Hit-and-run damage
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Damage caused by other drivers without insurance
Vollkasko is commonly chosen for new, leased, or high-value vehicles.
3. Cost of Car Insurance in Germany
The cost of car insurance in Germany varies significantly based on several factors. On average:
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Third-party liability: €300–€600/year
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Partial coverage (Teilkasko): €500–€800/year
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Full coverage (Vollkasko): €800–€1,500/year
Factors that Affect the Cost:
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Driver’s age and experience: Young and inexperienced drivers pay more.
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Driving history: Accident-free history reduces premiums.
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Location: Cities with high accident rates have higher premiums.
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Car make, model, and engine size: Expensive or powerful cars cost more.
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Annual mileage: More kilometers driven increases risk.
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Bonus-malus system (Schadenfreiheitsklasse): This "no-claims bonus" system rewards drivers with lower premiums the longer they drive without making a claim.
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Type of use: Commercial use may be more expensive than private use.
4. The Bonus-Malus System (Schadenfreiheitsrabatt)
Germany uses a no-claims discount system, which rewards careful drivers. If you don’t make any claims during a year, you are placed in a higher Schadenfreiheitsklasse (SF-Klasse), which reduces your premium.
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SF 0 = Beginner (highest premium)
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SF 1/2 = First-time driver
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SF 1–20+ = Years of accident-free driving
Drivers with 20+ years of clean driving can receive discounts of up to 80% off the base premium.
5. How to Choose a Car Insurance Provider
There are many insurance companies in Germany offering vehicle insurance. Some of the most well-known include:
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Allianz
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AXA
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HUK-Coburg
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DEVK
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ERGO
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Zurich
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LVM
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CosmosDirekt
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DA Direkt
Key Considerations When Choosing a Provider:
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Coverage options and add-ons
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Premium and deductible amounts
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Customer reviews and claims process
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English-speaking support for expats
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Online account and mobile app availability
You can compare quotes and policies using tools like:
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Check24.de
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Verivox.de
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Finanztip.de
6. Registration and Insurance: The EVB Number
When registering a car in Germany, you must present an eVB number (elektronische Versicherungsbestätigungsnummer), which proves that your car is insured.
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This number is provided by your insurance company.
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It is mandatory for car registration (Zulassung).
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Without this number, you cannot get license plates or legally drive the car.
The process is entirely digital, and the registration office can verify the insurance electronically using this number.
7. Car Insurance for Expats and Foreign Drivers
Expats often find German insurance rules strict and bureaucratic. However, most providers are expat-friendly.
Tips for Expats:
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If you’ve had a clean driving history in your home country, try to get a letter from your previous insurer to transfer your no-claims bonus.
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Some German insurers accept international no-claims records (especially from the EU).
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Choose insurers with English-speaking agents or expat support lines.
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Be aware that foreign licenses may need to be exchanged for a German license after a set period, depending on your country of origin.
8. Optional Add-Ons and Extra Coverage
German insurers often allow drivers to customize their policies with extras like:
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Roadside assistance (Schutzbrief)
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Legal protection insurance (Rechtsschutzversicherung)
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Breakdown cover
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Coverage for personal belongings in the car
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Rental car during repairs
These add-ons increase premiums but can provide peace of mind.
9. Making a Claim
If you are involved in an accident:
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Stay calm and ensure safety.
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Call the police if there are injuries or major damage.
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Exchange contact and insurance information with the other driver.
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Take photos and document the scene.
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Report the accident to your insurance company as soon as possible.
German insurers are efficient, but proper documentation is key. Claims involving third parties often require legal and medical reports.
10. Tips to Reduce Insurance Premiums
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Choose a car with a lower insurance class.
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Increase your deductible (Selbstbeteiligung).
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Drive less annually.
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Use a garage or off-street parking.
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Install anti-theft systems.
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Avoid frequent claims to improve your SF class.
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Combine insurance policies (e.g., home and car) for discounts.
11. Insurance for Leased and Financed Cars
If you lease or finance a car, the contract will require full coverage (Vollkasko). The leasing company wants to ensure the vehicle is fully protected in all situations.
You may also be required to take GAP insurance, which covers the difference between the car’s market value and the remaining lease payments if the car is totaled.
12. Driving Without Insurance in Germany
Driving uninsured is a serious offense in Germany. Consequences can include:
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Fines up to €5,000
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Driving ban
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Confiscation of vehicle
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Jail sentence in extreme cases
Always ensure your policy is up-to-date and active.
Conclusion
Germany’s car insurance system is comprehensive, well-regulated, and designed to protect both drivers and the public. Whether you're a long-time resident or a newcomer, understanding the different types of coverage, costs, legal obligations, and how to choose the right policy is essential.
From the required liability insurance to full comprehensive protection, car insurance in Germany is not just a legal formality—it’s a crucial part of responsible vehicle ownership. With the right policy, you can enjoy Germany’s world-class roads with peace of mind and financial protection.