Car Insurance in Germany

How does car insurance work in Germany?

This page contains topics:

  1. Types of Vehicle Insurance in Germany
  2. Factors that can Affect Car Insurance Cost
  3. What is Schadenfreiheitsklasse (SF Class)
  4. Switching car insurance
  5. Insurance for Rental Cars
  6. International Green Card
  7. Insurance of More than One Vehicles
  8. Acquisition of SF Class from Third Party Contracts
  9. Transfer of SF Class from Motorcycle to Car
  10. Carsharing Experience


Categories of Cars Insurance in Germany

The German word for vehicle insurance is Versicherung. Vehicle insurance is translated as Autoversicherung / Kraftfahrzeugversicherung or Kfz-Versicherung. Basic vehicle insurance, that covers liabilities is mandatory in Germany. Insurance company issues an electronic insurance number eVB (elektronische Versicherungsbestätigung). This number is mentioned later on vehicle registration papers. (Fahrzeugbrief and Fahrzeugschein).

There are three categories of car insurance in Germany:

  1. Kfz-Haftpflichtversicherung (Third party liability coverage)
  2. Teilkaskoversicherung (Partial coverage insurance)
  3. Vollkaskoversicherung (Comprehensive insurance)

Kfz-Haftpflichtversicherung (Liability Coverage)

Haftpflichtversicherung or in short, Haftpflicht is the most basic and mandatory insurance to register a vehicle. In case of an accident, the driver at fault is legally obliged to cover all the damages to other vehicles or property, and also the medical bills in case of an injury.

Haftpflicht covers all damages to other vehicles and property as well as any injuries cased to other persons in case of an accident with your vehicle. However, it does not cover any damage to your car or your medical bills, if accident happens due to your fault.

Teilkaskoversicherung (Partial Coverage Insurance)

A partial coverage insurance or comprehensive insurance is not required by law. It includes all the benefits of above described Haftpflicht and adds certain coverage to your own vehicle. For example, damages due to weather (hail damage, thunderstorm, lightning or flood, etc.), wild animals, glass damage, fire or explosion, theft and robbery.

Teilkasko and Vollkasko are recommended only for comparatively newer vehicles.

Vollkaskoversicherung (Comprehensive Insurance)

This is top of the line coverage and of course expensive. The comprehensive insurance also covers damage caused by own fault or a third party like vandalism and damage by unknown third parties.

If you buy a brand new vehicle through a third party financing for example bank, they often have a condition of Vollkasko (comprehensive coverage). In general, owners of brand new vehicles are advised to have comprehensive insurance.

Factors that can Affect Car Insurance Cost

The cost of insurance is not same for everyone, rather it depends on many factors, which are described as follows.

1. Accident

A driver who causes an accident and found liable would pay more insurance in future. In case of minor damages, it is advisable to settle the payment on the scene or without involving the insurance company.

Each driver has a class of insurance, SF-Klasse or a 'Schadenfreiheitsklasse. This class is lowered after an accident with liability. SF class (Schadenfreiheitsklasse or SF-Klasse) is discussed in detail below on this page.

2. Driving Experience

If you are a new driver and have just got a new driving license in Germany without any previous record of driving at home country, you would have to pay more insurance cost than normal, because new drivers pay more than the experienced ones.

These extra costs normally last for one year for novice driver, who is actually driving a vehicle on road. If a person after getting his driving license is not practically driving, he would be considered unexperienced until his license is three years old.

After one year of driving you can talk to some other insurance company and if they offer a lower price, sign a new contract with them. Don’t sign a contract longer than a year in the beginning. The German word for contract is “Vertrag”. Be careful while signing any “Vertrag” and do not sign any document, unless you know it fully.

3. Home country / Foreign Insurance Record

German insurance companies accept the insurance records from foreign insurance companies. This can decrease the insurance cost and driver is not considered as a new. If a particular company is not accepting your previous insurance record, try with some other company.

4. Type of Car

German Insurance Association (GIA) has accident data of all models of different vehicles. Car models with higher accident ratio have expensive insurance. Smaller models that are popular among novice drivers, often have higher insurance cost.

Similarly, a car with greater horsepower or money value cost more insurance price.

5. Area of Driving

Drivers in the urban areas have to pay more insurance than countryside drivers. Also, areas with comparatively higher crime rate have higher insurance cost.

6. Number of Drivers

Depending on the company, insurance cost increases with the number of drivers. If a second driver from your family causes an accident and his/her name was not shared with insurance, it can cause problems.

What is Schadenfreiheitsklasse (SF Class)

Schadenfreiheitsklasse in short SF-Klasse, can be translated as no-claim class in English. The SF class indicates the number of years without damage or the damage history of the contract. A driver with newly got license and with no insurance history has SF class 0 and his membership cost (Beitragssatz) would be above 100% (that means he has to pay full membership fee without any discount).

The longer a driver accident-free drives, cheaper and higher is the SF class (up to a maximum of SF 35). Also, the membership cost decrease (from 100%) with each accident-free year. In the first of driving without accident the driver can gain SF class 1 and the membership cost (Beitragssatz) may fall from above 100% to somewhere between 65%-100%.

Important! There is difference between membership cost among different insurance companies. The following table gives general information.

For exact rates, you can ask current details sheet from your company.

Membership cost (Beitragssatz) according to SF class:

On small screens, please drag the below table left or right to see the full width.
SF Class Condition Membership cost in %
M Novice drivers after an accident by own fault over 100%
S After downgrading from SF 1 Over 100%
KL 0 novice drivers (Driving license is under 3 years old) Over 100%
SF½ At least 3 years old driving license from EU Over 100%
SF1 1 year of accident free driving Approx. 65 – 100%
SF2 2 years of accident free driving Approx. 60%
SF3 3 years of accident free driving Approx. 55%
SF4 4 years of accident free driving Approx. 50%
SF5 5 years of accident free driving Approx. 45-50%
And so on till SF class 35

Last SF class is 35. That means after 35 years of accident free driving, driver has to pay only 20% of the actual insurance cost. After an accident, however, he / she will be downgraded to one or more levels.

Anyone who has caused a particularly large number of accidents can be classified in the M class (malus class). In this lowest class, an insurance premium has to be paid, sometimes with a high surcharge.

Switching car insurance

It is possible to switch car insurance under the following circumstances: You are nearing the end of your annual contract, there has been an increase in premium, your type class changes, there has been a claim, there has been a change in vehicle or vehicle owner.

It is worth comparing car insurance providers once a year to make sure you are getting the coverage you need. A helpful source of information about switching and comparing car insurance providers is available online.


Insurance for Rental Cars

Cars from rental companies are already ensured for the time a customer is driving a car. It’s better to clear the terms and conditions of insurance in advance.

International Green Card

This card can be used outside Germany as proof of vehicle insurance. Most insurance companies issue this card. If your company hasn’t given this card to you, talk with them about this card. This card is helpful outside Germany in case of an accident.

Insurance of More than One Vehicles

If you own more than one vehicle or your family owns more than one vehicle, every other vehicle can be insured as “second car” under the same policy and company (in German “Zweitwagenversicherung”). The insurance cost of “second car” is considerably low.

Parents can also register cars of their children as their own Zweitwagan (second cars), even if they don’t live with them. In this case, children can save extra costs which they have to pay as new drivers. Parents do not have to worry about their SF class (Schadenfreiheitsklasse) deteriorating for the first car if the child crashes with the second car. The downgrading is in this case only for the second car.

Acquisition of SF Class from Third Party Contracts

SF class can be bought / over taken from life partner, parents, grandparents or other relatives. When overtaking no-claims discount, the old policyholder loses all his SF classes in this contract. That's worth it only if a contract is no longer needed. For example, if an old driver of your relatives decides not to drive in the future, you could take advantage of this and take over the relatives' accident-free years.

Transfer of accident free year also depends on year of issuance of the driver’s license of recipient (age of driving license). For example, a 23-year-old driver, who has a driver's license at the age of 18, can take over a maximum of five SF classes, because his driver’s license is just five years old.

Transfer of SF Class from Motorcycle to Car

SF class can also be transferred from motorcycle or scooter to car. Only condition is that motorcycle or scooter should has at least 50cc engine. If you have been driving a motorcycle for more than six months and now want to buy a car, SF class of motorcycle insurance can be transferred to car. Similarly, if you have a car model with higher insurance and now you bought a car model that can have cheaper insurance, you can swap the SF classes of your vehicles. Choose the model with higher insurance as second car “Zweitwagan”.

Also, if you have been driving motorcycle in your home country and have insurance proof, it can be presented to insurance company in Germany to improve the SF class. Chances are that insurance company would award one level downgraded SF class as that of motorcycle, but anything higher than class 0 or SF1/2 saves a lot of money for new a driver.

Carsharing Experience

Insurance companies also accept driving experience from carsharing companies. For example, you got a new driving license in Germany and have been driving a car of carsharing for at least six months. Now if you want to own a car, you can get written confirmation about your driving experience from your carsharing company and present it to insurance company for discount.


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