Germany is famous worldwide for its cars, autobahns, and strict traffic regulations. Owning a car in Germany comes with responsibility—and one of the biggest is having the right car insurance (Kfz-Versicherung).
Unlike some countries where insurance is optional, car insurance in Germany is mandatory by law. Without it, you cannot register or drive a vehicle. But with so many types, providers, and coverage options, choosing the right policy can be confusing, especially for expats and newcomers.
This guide explains everything you need to know about car insurance in Germany—types of policies, coverage options, costs, and how to find the best deal.
1. Why Car Insurance is Mandatory in Germany
Car insurance protects both drivers and other road users. Since traffic accidents can result in massive damages and medical costs, the German government requires every vehicle owner to carry liability insurance at minimum.
Without valid car insurance:
- You cannot register your car at the Kfz-Zulassungsstelle (vehicle registration office).
- Driving uninsured is illegal and punishable with heavy fines, license suspension, and even imprisonment.
2. Types of Car Insurance in Germany
German car insurance is divided into three main categories:
a. Third-Party Liability Insurance (Haftpflichtversicherung) – Mandatory
- Covers damages and injuries caused to others in an accident.
- Does not cover damage to your own vehicle.
- Minimum requirement for all cars in Germany.
Example: If you crash into another car, liability insurance covers the repair costs of the other vehicle and medical bills of injured parties.
b. Partial Coverage Insurance (Teilkasko) – Optional
- Covers additional risks beyond liability.
- Protects your car against:
- Theft.
- Fire, explosion.
- Natural disasters (hail, storm, flooding).
- Broken glass (windshield, windows).
- Animal-related damage (e.g., deer collision).
- Cheaper than full coverage, often chosen for older cars.
c. Comprehensive Insurance (Vollkasko) – Optional
- Offers the highest level of protection.
- Includes everything in liability and partial coverage.
- Covers damages to your own car, even if you caused the accident.
- Includes vandalism and hit-and-run damage.
- Recommended for new or high-value vehicles.
Example: If you crash your new BMW due to your own mistake, Vollkasko will cover your car repair costs.
3. What Car Insurance Covers
Depending on the type, policies can include:
- Personal injury coverage (medical expenses for third parties).
- Property damage (other vehicles, buildings, road structures).
- Legal defense costs in traffic disputes.
- Repair or replacement of your own car (if fully insured).
- Towing services after an accident.
- Rental car coverage while your car is repaired.
4. What Car Insurance Does Not Cover
There are exclusions to be aware of:
- Driving without a valid license.
- Accidents under the influence of alcohol or drugs.
- Intentional damage.
- Wear and tear (mechanical breakdowns).
- Using the car for unauthorized purposes (e.g., racing).
5. How Much Does Car Insurance Cost in Germany?
Car insurance premiums depend on several factors:
a. Personal Factors
- Age and driving experience.
- Accident history (bonus-malus system).
- Region (urban areas are more expensive).
- Profession (some jobs have lower risk categories).
b. Vehicle Factors
- Car model and value.
- Engine power (high-performance cars cost more).
- Age of the vehicle.
- Safety features.
c. Policy Choices
- Deductible amount (Selbstbeteiligung).
- Coverage type (Haftpflicht, Teilkasko, Vollkasko).
- Optional extras (rental car, roadside assistance).
Average Costs (2025):
- Liability only: €250–€500 per year.
- Partial coverage (Teilkasko): €400–€700 per year.
- Full coverage (Vollkasko): €600–€1,500 per year (depending on car value).
6. The Bonus-Malus System (Schadenfreiheitsklasse – SF)
Germany uses a no-claims bonus system to reward safe drivers.
- Each year without an accident increases your SF class.
- The higher your SF class, the lower your premium.
- Example: SF10 (10 years without a claim) may give a 50–60% discount.
However, if you cause an accident, your SF class drops, and your premium increases significantly.
7. Car Insurance for Expats and Foreigners
Expats often face challenges when buying car insurance in Germany:
- Foreign driving experience: Insurers may not recognize no-claims bonuses from abroad.
- International licenses: You may need a German license within 6 months to qualify.
- Higher premiums: Newcomers without German driving history often pay more initially.
Tip: Some insurers accept foreign no-claims certificates if officially translated.
8. Required Documents for Car Insurance
To apply for car insurance in Germany, you need:
- Vehicle registration papers (Zulassungsbescheinigung Teil I & II).
- Driver’s license.
- Bank details for monthly premium payments.
- Proof of previous insurance (if transferring SF class).
When you sign up, the insurer provides an eVB number (Elektronische Versicherungsbestätigung), which is required to register your car.
9. Major Car Insurance Providers in Germany
Germany has many car insurers, ranging from traditional companies to online-only providers. Popular ones include:
- Allianz – comprehensive coverage, strong customer service.
- HUK-Coburg – competitive prices, popular among locals.
- AXA – wide network, international support.
- DEVK – affordable and reliable.
- Direct Line & Check24 partners – online comparison platforms with flexible offers.
10. Tips for Saving on Car Insurance
- Compare quotes: Use online comparison sites like Check24 or Verivox.
- Choose a higher deductible: Lowers monthly premiums.
- Avoid unnecessary extras: Only add services you truly need.
- Park safely: Cars kept in garages often get lower rates.
- Consider annual payment: Paying once a year is usually cheaper than monthly.
- Share SF class: Sometimes, family members can transfer no-claims discounts.
11. Real-Life Scenarios
- New Car Owner: Lisa bought a new Audi and chose Vollkasko to protect against costly repairs. After a minor accident, her insurance covered €5,000 in damages.
- Student Driver: Tom, a 21-year-old student, paid €1,200 annually for liability due to his age and lack of driving experience.
- Expat Example: John, from the UK, moved to Berlin. His insurer accepted his UK no-claims certificate, saving him €300 annually.
12. Common Mistakes to Avoid
- Buying liability only for a brand-new car—repair costs could ruin finances.
- Not checking if foreign SF class can be transferred.
- Forgetting to cancel insurance when selling the car—premiums keep running.
- Failing to update policy after moving—address changes affect premiums.
13. Final Thoughts
Car insurance in Germany is not just a legal obligation—it’s a crucial financial protection for both drivers and society. While liability insurance is mandatory, many drivers choose partial or full coverage for greater peace of mind.
Costs can be high, especially for young drivers and expats, but smart choices like higher deductibles, safe driving, and comparing offers can significantly reduce premiums.
Whether you are a local or a newcomer, understanding how German car insurance works helps you avoid mistakes, save money, and ensure that you and others are protected on the road.