The German Motor Vehicle Insurance System
Motor vehicle liability insurance is used to protect third parties in case of accidents and covers the legally prescribed insurance minimum. There are still other options open to car owners in Germany who wish to insure their cars in a more comprehensive way: third-party, fire and theft insurance policies comprise coverage for damage to one’s own car following accidents, vandalism, natural catastrophes, theft, damage caused by game or even glass shattering because of rock fall, at different co-payment rates. Depending on co-payment, but also on the number of years driven without accident, payment rates for liability insurance as well as third-party, fire and theft insurance vary, sometimes to significant extents. Regardless of the type of damage covering, the payment type of the insurance holder (monthly, quarterly, biannually or yearly), the classification according to car classes, the age and gender of the driver as well as the place of residence or the registration district all play an important part in determining how high the insurance premium to pay will be.
Of course, all insurance companies offer discounts, for example, a garage discount if the car is placed in a garage. Often, there are also discounts available depending on the number of kilometers driven (infrequent drivers’ discounts), on the number of drivers (partner discounts), or for families with children (family discounts). Not every insurance company offers the same amount on each discount; thus, it is useful to gather information from the insurance company first.
Car classes in Germany
Car classes refer to a yearly classification of types of vehicles by insurance companies, depending on statistical probability of damage. Depending on whether one chooses to insure one’s car with the legally determined minimum (car liability insurance) or whether one wants an extension of insurance coverage (third-party, fire and theft insurance), there can be differences in the classification. The German Insurance Association (GIA) yearly publishes a register of car classes, which all insurance companies are bound to in order to ensure better comparability for insurance holders.No-claim discounts in Germany
Apart from the car type class, the no-claim discount also plays a big part in determining the amount of insurance premium to pay. The no-claim discount depends on the time spent driving without accidents during the time as an insurance holder. Therefore, the longer one drives and the longer one drives without accidents, the cheaper the premiums become. For debuting drivers, this means paying the highest premiums, often 240% of the overall contribution rate. The cheapest premiums are paid by drivers who have driven many years without being involved in an accident.When a small accident happens, one is not automatically moved down in the classification. This impending punishment may only happen in the next insurance year, but it can be avoided. Either one pays small damages out of one’s own pocket and does not involve one’s insurance policy or one has a so-called discount-saver: If one pays a small surcharge on the insurance premium, the insurance company will show itself to be obliging and takes care of small incidents without raising the insurance premium for the next year.
If one wishes to switch car insurance, no-claim discounts can be transferred to the new insurance without losses.
