Car Insurance in Germany: Everything You Need to Know

Car insurance in Germany is not just a financial product — it’s a legal requirement and an essential part of owning or operating a vehicle in one of Europe’s most car-oriented nations. With its world-famous autobahns, strict traffic laws, and efficient road systems, Germany maintains a robust framework for vehicle insurance to ensure safety, accountability, and financial protection for all drivers.

This article explores how car insurance works in Germany, its types, coverage requirements, costs, major providers, and tips for choosing the right policy.

1. Legal Requirement for Car Insurance in Germany

In Germany, car insurance is mandatory under federal law. Every motor vehicle that operates on public roads must have at least third-party liability insurance (Kfz-Haftpflichtversicherung). Without it, you cannot register your car, get license plates, or legally drive.

The reason for this requirement is simple — it ensures that if you cause damage, injury, or death in a car accident, the victims are financially compensated.

When you buy or register a car in Germany, you must present an eVB number (Elektronische Versicherungsbestätigungsnummer) — an electronic insurance confirmation code provided by your insurer. This number proves that you have at least basic liability coverage.

2. Types of Car Insurance in Germany

There are three main types of car insurance in Germany. Each offers a different level of protection depending on your needs and budget.

a. Third-Party Liability Insurance (Kfz-Haftpflichtversicherung)

This is the minimum legal requirement. It covers damages you cause to other people, vehicles, or property. However, it does not cover any damage to your own vehicle or injuries you suffer yourself.

Coverage typically includes:

• Damage to other vehicles or property

• Medical expenses for injured third parties

• Legal defense costs in case of disputes

While it’s the cheapest option, it leaves your own car unprotected in case of accidents that are your fault.

b. Partial Coverage (Teilkasko)

Partial coverage builds upon liability insurance and offers additional protection against specific risks such as:

• Fire, explosions, and short circuits

• Theft of the car or its parts

• Storms, hail, floods, and natural disasters

• Broken glass (windows, headlights, mirrors)

• Collisions with animals

It’s a good middle-ground for car owners who want protection against external events beyond their control but don’t need full coverage.

c. Comprehensive Coverage (Vollkasko)

Comprehensive insurance provides the highest level of protection. It includes all benefits of both liability and partial coverage, plus:

• Damage to your own car caused by you (even if you’re at fault)

• Vandalism or malicious damage

• Accidents involving hit-and-run situations

Comprehensive insurance is often required for leased or financed vehicles, as banks and leasing companies need assurance that the car is fully protected.

3. How the Bonus-Malus (No-Claim) System Works

Germany’s car insurance premiums are heavily influenced by the Schadenfreiheitsklasse (SF-Klasse), also known as the no-claims bonus system.

Every year you drive without making a claim, your SF class improves, and your insurance premium decreases. For example:

• SF1: 100% base rate

• SF5: about 60% of the base rate

• SF10: around 40%

• SF20+: as low as 25%

However, if you cause an accident and file a claim, your SF class may be downgraded, which increases your future premiums. This system encourages careful driving and rewards those who avoid accidents.

4. Factors That Affect the Cost of Car Insurance

Car insurance premiums in Germany vary widely depending on multiple factors. Insurers evaluate your risk profile based on:

1. Type of Coverage:
   Vollkasko (comprehensive) is the most expensive, followed by Teilkasko (partial), then liability-only.

2. Driver’s Age and Experience:
   Young or inexperienced drivers pay higher premiums due to higher accident risks.

3. Vehicle Type and Value:
   Luxury, sports, or high-powered cars cost more to insure than smaller, economy models.

4. Postal Code (Regionalklasse):
   Urban areas with more accidents and thefts have higher premiums than rural regions.

5. Annual Mileage (Kilometerleistung):
   The more you drive, the higher your risk of an accident — which means higher premiums.

6. Parking Location:
   Cars parked in private garages are cheaper to insure than those parked on public streets.

7. Driver’s No-Claim Record (SF-Klasse):
   The longer you drive without an accident, the lower your costs.

8. Car Usage Type:
   Business or commuting use may cost more than occasional personal use.

5. Average Cost of Car Insurance in Germany

While prices vary by driver and car type, here’s an approximate range:

• Liability-only insurance: €150–€400 per year

• Partial coverage (Teilkasko): €300–€700 per year

• Comprehensive (Vollkasko): €600–€1,500 per year

You can save significantly by comparing quotes online, adjusting deductibles, or improving your SF class.

6. Major Car Insurance Providers in Germany

Germany has a competitive car insurance market with dozens of providers. Some of the most popular and reputable ones include:

• Allianz: One of the largest insurers in Europe, offering full-service coverage and excellent customer support.

• HUK-Coburg: Known for affordable prices and reliable claims service.

• AXA: Offers flexible policies and good discounts for safe drivers.

• DEVK: Provides solid coverage for families and commuters.

• LVM: A well-established insurer with local offices across Germany.

• CosmosDirekt: A digital insurer with competitive online rates.

• ADAC (Allgemeiner Deutscher Automobil-Club): Known for excellent roadside assistance and member benefits.

Each insurer offers different discounts, online management options, and add-ons — so comparing offers is essential.

7. How to Get Car Insurance in Germany

Getting car insurance is a straightforward process:

1. Compare Offers: Use comparison websites like Check24, Verivox, or Tarifcheck to find the best deals.

2. Select the Type of Coverage: Decide between Haftpflicht, Teilkasko, or Vollkasko.

3. Provide Vehicle and Personal Details: Include your car model, registration, and driving history.

4. Receive Your eVB Number: Once approved, your insurer sends this code to complete vehicle registration.

5. Register Your Vehicle: Visit the local registration office (Zulassungsstelle) to register your car using the eVB number.

6. Start Your Coverage: Your policy becomes active once your car is legally registered.

8. Optional Add-Ons and Extras

Many insurers offer optional extras to enhance your protection, such as:

• Roadside assistance (Schutzbrief) — for towing, breakdown help, and travel support.

• Passenger accident insurance — covering injuries to passengers.

• Legal protection (Verkehrsrechtsschutz) — covers legal costs in traffic disputes.

• New-for-old replacement — for recently purchased cars that are totaled.

• Extended wildlife damage — for collisions with non-listed animals.

These add-ons can increase costs but provide peace of mind in many real-life situations.

9. What to Do After an Accident

If you’re involved in a car accident in Germany, follow these steps:

1. Secure the Scene: Turn on hazard lights, wear a reflective vest, and set up a warning triangle.

2. Check for Injuries: Call emergency services (112) if anyone is hurt.

3. Notify the Police: For serious accidents or disputes, always involve the police.

4. Exchange Information: Swap names, insurance details, and license plate numbers.

5. Document Everything: Take photos of the scene, damage, and surroundings.

6. Inform Your Insurer: Report the accident as soon as possible — ideally within 7 days.

Your insurer will assess the damage and guide you through the claims process.

10. Tips for Saving on Car Insurance

• Compare policies annually — rates and discounts change often.

• Increase your deductible (Selbstbeteiligung) — lowers your premium.

• Avoid unnecessary coverage — tailor your plan to your car’s age and value.

• Maintain a clean driving record — protects your SF bonus.

• Bundle policies — some insurers give discounts for combining home or health insurance.

• Use telematics programs — monitor safe driving and earn discounts.

11. Conclusion

Car insurance in Germany is a crucial part of driving safely and responsibly. The system is designed not only to protect drivers financially but also to promote careful behavior on the road through the no-claims bonus structure. Whether you drive a new BMW, an old Volkswagen, or a secondhand Opel, the right insurance ensures peace of mind and legal compliance.

By understanding the types of coverage, how premiums are calculated, and how to make smart comparisons, you can find a policy that fits your needs and budget. In a country where efficiency and safety go hand in hand, being well-insured is not just smart — it’s essential.