Car Insurance in Germany: Everything You Need to Know

Germany is known for its excellent infrastructure, high-quality vehicles, and the legendary Autobahn — a highway system famous for sections with no official speed limits. With millions of cars on the road and a deep automotive culture, car insurance in Germany plays a crucial role in maintaining safety, accountability, and financial protection for all drivers. Understanding the German car insurance system is essential for anyone who owns or drives a vehicle in the country, whether a local resident or a foreigner.

This article explores how car insurance works in Germany, its types, costs, legal requirements, and tips for finding the right policy.

1. The Legal Requirement for Car Insurance

In Germany, car insurance is mandatory by law. Every vehicle that operates on public roads must have at least third-party liability insurance (“Haftpflichtversicherung”). This legal requirement ensures that if a driver causes an accident, the victims are compensated for any damages or injuries.

Without proof of valid car insurance, it’s impossible to register or drive a vehicle in Germany. When registering your car at the local vehicle registration office (“Zulassungsstelle”), you’ll need an electronic confirmation number known as an eVB number (Elektronische Versicherungsbestätigung), which confirms your vehicle is insured.

Driving without insurance in Germany is a serious criminal offense that can result in:

• Heavy fines

• License suspension

• Possible imprisonment

• Confiscation of the vehicle

So, obtaining valid insurance is not just a formality — it’s a legal and moral obligation.

2. Types of Car Insurance in Germany

There are three main types of car insurance policies available in Germany. Each provides different levels of coverage and costs, allowing drivers to choose based on their budget and the value of their vehicle.

a) Third-Party Liability Insurance (Haftpflichtversicherung)

This is the minimum required by law. It covers:

• Damage to other people’s vehicles

• Medical expenses for injured parties

• Property damage caused by your vehicle

However, it does not cover any damage to your own car or injuries to you as the driver. This type of insurance is suitable for older or low-value cars where additional coverage may not be cost-effective.

b) Partial Coverage Insurance (Teilkaskoversicherung)

This optional insurance provides additional protection beyond liability. It covers:

• Theft of your car

• Fire, explosion, and short-circuit damage

• Broken windows or windshield damage

• Natural disasters (hail, storms, floods)

• Animal collisions (such as deer or wild boar)

Partial coverage is popular among owners of mid-range vehicles because it provides a good balance between affordability and protection.

c) Comprehensive Coverage Insurance (Vollkaskoversicherung)

This is the most extensive and expensive car insurance option in Germany. It includes everything in both liability and partial coverage, plus:

• Damage to your own car caused by an accident (even if it’s your fault)

• Vandalism

• Damage caused by hit-and-run drivers

Comprehensive insurance is generally recommended for new or expensive cars, leased vehicles, or company cars. Although it costs more, it provides peace of mind and greater financial security.

3. Factors That Affect Car Insurance Costs

Car insurance premiums in Germany depend on multiple factors. Insurers use a detailed risk assessment system that takes into account both the driver and the vehicle.

a) Vehicle Type and Class (Typklasse)

Each car model is classified based on its accident statistics, repair costs, and theft rates. High-performance or luxury vehicles are typically in a higher class, resulting in higher premiums.

b) Region (Regionalklasse)

The area where the car is registered also affects insurance costs. Urban regions with higher accident or theft rates, like Berlin or Munich, usually have higher premiums compared to rural areas.

c) Driver’s Age and Experience

Younger or inexperienced drivers generally pay more because they are statistically more likely to be involved in accidents. Premiums tend to decrease after age 25 and with several years of accident-free driving.

d) No-Claims Bonus (Schadenfreiheitsrabatt)

Germany has a no-claims discount system that rewards safe driving. For each year you drive without filing a claim, your insurance premium decreases. Over time, you can save up to 70–80% off the original price.

e) Mileage and Car Usage

The fewer kilometers you drive per year, the cheaper your insurance may be. Insurers also consider whether you use the car for commuting, business, or leisure purposes.

f) Parking and Security

Keeping your car in a garage instead of on the street can reduce the risk of theft or vandalism, leading to lower premiums.

4. How to Choose the Right Insurance Company

Germany has many reputable car insurance providers, from traditional companies to online-only insurers. When choosing an insurance company, consider the following:

• Reputation and customer service: Check reviews and reliability, especially for claim handling.

• Price comparison: Use online comparison tools such as Check24 or Verivox to compare premiums and coverage.

• Policy flexibility: Look for providers offering easy adjustments if your circumstances change.

• Language support: For foreigners, choosing an insurer that offers English-language support can make a big difference.

It’s also smart to review your policy yearly to ensure you’re getting the best rate, as premiums and discounts can change.

5. The Process of Getting Car Insurance in Germany

Getting insured in Germany is straightforward if you understand the steps:

1. Compare quotes from different providers online.

2. Select your coverage type (liability, partial, or comprehensive).

3. Provide personal and vehicle details, including license plate, car make, and driving history.

4. Once approved, you’ll receive an eVB number for registration.

5. Register your car at the local registration office using this eVB number.

Your insurance becomes active as soon as your car is registered.

6. Switching Car Insurance Providers

Switching insurance providers in Germany is possible and often beneficial if you find a better deal. Most policies can be canceled annually, usually by November 30th, since insurance contracts renew automatically on January 1st.

Reasons to switch include:

• Lower premiums elsewhere

• Better coverage options

• Unsatisfactory customer service

• Major life changes (like moving or buying a new car)

Always ensure you have a new policy in place before canceling the old one to avoid a coverage gap.

7. Car Insurance for Foreigners in Germany

Expats, international students, and foreign workers driving in Germany must also comply with the insurance law. If you import a car from another country, you need to register it locally and get German insurance.

Foreigners with international driving permits can drive temporarily, but once you become a resident, you’ll need a German driving license and German insurance. Many insurers offer English-language services for expatriates to make the process easier.

8. Additional Optional Coverages

Besides the standard types of insurance, you can purchase extra add-ons to enhance your protection:

• Roadside Assistance (Schutzbrief): Covers towing and on-the-spot repairs.

• Legal Protection Insurance (Verkehrsrechtsschutz): Helps with legal fees in case of disputes.

• Passenger Accident Insurance (Insassenunfallversicherung): Covers injuries to passengers.

• Gap Insurance: Covers the difference between the car’s market value and the remaining loan amount in case of total loss (especially useful for leased cars).

9. The Future of Car Insurance in Germany

With rapid technological advances, the German car insurance industry is evolving. Telematics, where insurance rates are based on actual driving behavior (speed, braking, acceleration), is becoming increasingly popular. Electric vehicles (EVs) and autonomous driving technologies are also reshaping the market, leading insurers to develop new products tailored to these innovations.

Sustainability is another major trend — many insurers now offer discounts for eco-friendly or electric cars to encourage green mobility.

Conclusion

Car insurance in Germany is more than a legal requirement — it’s an essential aspect of responsible driving. The system is designed to protect both drivers and victims of accidents, ensuring fairness and accountability on the roads. Whether you choose basic liability, partial, or full comprehensive coverage, understanding how car insurance works will help you make informed decisions and stay compliant with the law.

By comparing offers, maintaining a clean driving record, and understanding the factors that influence premiums, you can secure reliable protection at the best possible price. In a country renowned for its precision, efficiency, and driving culture, having the right car insurance in Germany ensures that every journey remains safe, secure, and worry-free.