Motor vehicle insurance Germany: mandatory for all owners of motor vehicles

Motor vehicle liability insurance is mandatory, but not all are equally good. Since damages in car accidents often run into the millions, you should have a high coverage amount – preferably at least 50 to 100 million euros.

Essential facts in brief:

• Motor vehicle liability insurance is required by law. No vehicle is registered without it.
• With comprehensive insurance, you can insure your vehicle more comprehensively. It is voluntary and often only worthwhile for expensive (new) cars.
• A car accident insurance is almost always redundant.
• A car insurance policy can be important when traveling abroad.
• Whether car, motorcycle, motorhome, scooter, moped, quad, S-pedelec, e-scooter: Every motor vehicle owner (Kfz) must have liability insurance.
• In addition, there are several other insurance products. We present the most important ones here and explain when you need them and how to find a suitable contract.

Motor vehicle liability insurance by FRI:DAY

FRI:DAY offers a car insurance that you can take out completely digitally, in 90 seconds. The big advantage of FRI:DAY’s car insurance is that it is purchased per kilometer. This means you never pay too much.

How does it work?

When you take out insurance, you estimate how many kilometers you will drive in a year and tell FRI:DAY. By the way, this works very easily online, no technical installation is required. If you drive less than estimated, you get your money back. Two thirds of the customers get their money back at the end of the year. If you drive more than the estimate, you only pay for the extra miles driven. Mileage-based billing is particularly worthwhile for low mileage drivers – for example, if you drive around 9,000 kilometers a year.

Note: If you don’t like this concept, FRI:DAY also offers classic car insurance.

No matter if you choose number-per-kilometer or original: In both products you can choose between motor liability, partial cover and fully comprehensive. While motor liability is the legally required insurance, comprehensive insurance offers more protection for you and your car.

Motor vehicle liability insurance in Germany

As the owner of a motor vehicle, you must take out motor vehicle liability insurance. Even if you own a leased vehicle, you are the owner and must take care of the insurance. As the owner, you are also responsible for ensuring that liability insurance covers anyone who drives the vehicle.

Insurance aims to ensure that the victim is compensated even if the person who caused an accident cannot pay or would be economically ruined by the victim’s claims.

It would be best if you never drove without insurance coverage: In the case of serious injuries, claims can quickly run into the millions, which you would have to pay yourself without insurance.

Insurers also offer higher coverage levels than the minimum required by law for a small premium surcharge. We recommend taking out a contract with very high coverage, preferably at least 50 to 100 million euros. That may sound a lot, but such sums occur in accidents involving many people.

If an accident occurs, the liability insurance checks whether claims by accident victims are justified. It then performs two tasks:

If the liability insurer considers the claims unjustified, it defends them at its own expense, if necessary, in court. Liability insurance, therefore, offers so-called “passive” legal protection.

If the insurance company considers the claims to be justified, it pays the damages – up to the amounts agreed in the insurance policy.

Such damages, which the insurance company must pay to accident victims, may include:

• Loss of earnings
• Compensation for pain and suffering
• A lifelong pension in the event of occupational disability
• Property damage (such as repair costs, compensation for loss of value of the vehicle or its replacement value)
• If the injured party needs a rental car during the repair or delivery period for a replacement vehicle, the rental vehicle will also be paid. Instead of a rental car, the injured party may also claim loss of use.

The insurer cannot refuse payment even in the event of gross negligence on the part of the party responsible for the accident. However, the insurer can claim up to 5000 euros from the driver in the following violations:

• If he used the vehicle for a purpose other than the agreed purpose (private vehicle used commercially as a cab)
• If he drove without a driver’s license
• In case he was not allowed to use the car (e.g., in case of theft)
• Driving while intoxicated or intoxicated
• Participation in illegal races.
• Unauthorized departure from the scene of an accident (also called hit and run/hit and run).
• You have no insurance cover at all, for example, in the case of damage caused intentionally (legally: wilfully) and unlawfully.

Comprehensive insurance

You can insure the vehicle and its accessories against damage, destruction, total loss, or loss with comprehensive insurance.

The accessories (car radio, navigation device, aluminum rims, etc.) are also insured within the scope of the respective parts list. So if you have costly accessories, it is worth taking a look at your insurance company’s list to see whether they are included in the protection.

In the comprehensive insurance, the repair costs or – in the case of total loss – the replacement value less the vehicle’s residual value are reimbursed. Scrap dealers, for example, often still pay a little for the accident vehicle, and an expert determines this residual value. You are responsible for selling the accident vehicle yourself, so you must then make sure that someone pays you about this amount.

There are two types of comprehensive insurance:

1. Partial comprehensive insurance provides coverage against fire, explosion, theft (theft, robbery, embezzlement, unauthorized use), storm (of at least wind force 8), hail, lightning, and flood.

Damage caused by the forces mentioned earlier of nature is included if objects are thrown onto or against the vehicle.

Collision with an animal (e.g., deer, wild boar) or – depending on the tariff – with other animals is also insured, Breakage damage to the glazing, damage to the wiring due to a short circuit, and cable damage caused by marten bites with many insurance companies.

Damage to tires is not covered.

2. Comprehensive insurance also covers damage caused by the malicious acts of others that cause you harm. It also covers you if you are responsible for an accident and your vehicle is damaged.

We recommend that you take out comprehensive insurance for expensive new cars and vehicles financed or leased on credit. For older vehicles, partial comprehensive insurance may be worthwhile – at least if you would not be able to afford a new car in the event of a total loss.