Car Insurance in Germany: A Comprehensive Guide for Residents and Expats

Germany is known for its engineering excellence, high-speed highways (Autobahnen), and a strong culture of road safety. At the heart of this automotive infrastructure is a strict but efficient system of car insurance. Whether you're a German citizen, a long-term resident, or an expat new to the country, understanding how car insurance works in Germany is essential not only for legal compliance but also for financial protection and peace of mind.

In this article, we’ll explore the structure, types, legal obligations, cost factors, and the claims process for car insurance in Germany—providing you with everything you need to know before hitting the road.

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1. Legal Requirements for Car Insurance in Germany

In Germany, car insurance is mandatory by law. No vehicle is allowed on public roads without valid insurance. The mandatory type of insurance is called “Kfz-Haftpflichtversicherung”, or motor vehicle liability insurance.

Key Points:

• Every registered vehicle must be insured.

• Proof of insurance is required to register a car.

• Driving without insurance can lead to hefty fines, license suspension, or even jail time.

When you buy a new or used car, you’ll need to provide your insurer’s electronic insurance confirmation code (eVB number) to the vehicle registration office (Zulassungsstelle). Without this, your vehicle cannot be legally driven.

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2. Types of Car Insurance in Germany

There are three main types of car insurance in Germany, each offering different levels of protection:

a. Liability Insurance (Haftpflichtversicherung) – Mandatory

This covers:

• Damage to other vehicles.

• Injuries to other people.

• Damage to property (e.g., buildings, fences).

It does not cover damage to your own vehicle or injuries to yourself.

b. Partial Coverage (Teilkasko) – Optional

Adds coverage for:

• Theft of the car or parts (e.g., radio, GPS).

• Vandalism and fire damage.

• Natural events (storm, hail, flooding).

• Broken windows.

• Animal collisions (especially with wild animals like deer).

c. Full Coverage (Vollkasko) – Optional

Includes everything in Teilkasko plus:

• Damage to your own vehicle caused by an accident (even if it's your fault).

• Vandalism.

• Accidents caused by unknown third parties (e.g., hit-and-run).

• Damage caused by the driver under the influence (with some limitations).

Full coverage is recommended for new or expensive cars, leased vehicles, or when you want maximum protection.

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3. How Much Does Car Insurance Cost in Germany?

Car insurance costs in Germany vary widely based on multiple factors. On average, a German driver can expect to pay between €300 and €1,000 per year, depending on:

a. Type of Coverage:

• Haftpflicht (Liability only): Cheapest.

• Teilkasko: Mid-range.

• Vollkasko: Most expensive.

b. Type of Vehicle:

• Engine size and horsepower (PS or kW).

• Safety ratings.

• Theft risk and repair costs.

• Insurance classification group.

c. Driver Profile:

• Age and gender.

• Years of driving experience.

• Driving history (accidents, points).

• No-claims bonus (Schadenfreiheitsklasse or SF-Klasse).

d. Location (Postcode):

• Urban areas usually have higher premiums due to higher accident and theft rates.

e. Annual Mileage:

• The more you drive, the higher the risk—and the higher the premium.

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4. No-Claims Bonus System (Schadenfreiheitsrabatt)

Germany has a well-developed bonus-malus system for rewarding safe drivers. The longer you drive without an accident, the more discounts you receive.

Each year without a claim increases your Schadenfreiheitsklasse (SF class), which can lead to significant premium reductions—up to 80% off the base rate after many years of accident-free driving.

However:

• A single claim can drop your bonus.

• It’s sometimes worth paying small damages out-of-pocket to protect your SF class.

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5. Car Insurance for Expats and Foreigners

If you’re moving to Germany or staying long-term, you’ll need German car insurance once you register your vehicle locally.

Requirements for Expats:

• Valid German address.

• German vehicle registration.

• A translated or EU-compatible driving license (non-EU licenses may need conversion after 6 months).

Many insurers offer services in English and cater to expats, including:

• Getsafe

• Feather Insurance

• DA Direkt

• Allianz

• AXA

Some may accept your foreign no-claims history, but this depends on the provider and documentation.

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6. Choosing a Car Insurance Provider

Germany has a competitive insurance market with a mix of traditional companies and digital-first providers. When choosing a provider, compare:

• Coverage scope.

• Deductibles (self-risk).

• SF bonus system.

• Monthly vs. annual payments.

• Customer service ratings.

Popular car insurers in Germany include:

• HUK-Coburg

• Allianz

• AXA

• DEVK

• CosmosDirekt

• LVM

• Direct Line

Comparison websites like Check24.de, Verivox.de, and Tarifcheck.de help you compare prices and policies easily.

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7. Making a Claim: The Process

If you're involved in an accident or your car is damaged/stolen, follow these steps:

Step 1: Ensure Safety

• Move to a safe location.

• Contact emergency services if needed.

Step 2: Document the Incident

• Take photos of the scene, damage, license plates, and documents.

• Exchange insurance information.

• Use the European Accident Report Form (Europäischer Unfallbericht).

Step 3: Inform Your Insurer

• Report the claim as soon as possible.

• Provide photos, police reports (if applicable), and documentation.

• You may need to bring your car to an approved workshop for inspection.

Insurers generally process claims efficiently, but timelines vary depending on complexity.

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8. Additional Car Insurance Options

Aside from the main coverage types, you may consider additional policies:

• Legal protection insurance (Rechtsschutz): Covers legal fees in case of a dispute.

• Breakdown assistance (Schutzbrief): Offers towing, roadside help, hotel stays.

• Gap insurance: Covers the difference between your car’s value and what you owe (useful for leased vehicles).

• Passenger accident insurance: Covers injuries to passengers in your vehicle.

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9. Green Card and International Coverage

If you plan to drive abroad, check whether your insurance covers other countries. The Green Card (Grüne Karte) is a document that confirms your liability insurance is valid in many European countries.

Germany is part of the Green Card system, and most policies automatically include European coverage, but always confirm before traveling.

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10. Deregistering and Canceling Car Insurance

When selling a car or leaving Germany:

• Return your license plates and registration document.

• Insurance ends automatically when the car is deregistered (Abmeldung).

• You can also cancel your insurance annually or when switching providers.

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Conclusion

Car insurance in Germany is a structured, efficient, and legally enforced system designed to ensure that all drivers are financially responsible for their actions on the road. From the legally required liability insurance to optional partial and full coverage plans, drivers in Germany have a range of choices to suit their needs.

With a strong bonus system, digital innovations, and a competitive market, getting insured in Germany is not only mandatory but also manageable. Whether you're a lifelong resident or a newcomer, understanding how car insurance works is key to navigating Germany’s roads with confidence and security.