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. Read our FAQ’s about Car Insurances in Germany!
Motor vehicle liability insurance
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FAQ – Motor Vehicle Liability Insurance in Germany
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Important Facts about the Motor Vehicle Liability Insurance in Germany
As a motor vehicle owner in Germany, you are legally required to have motor vehicle liability insurance. It is also your responsibility to ensure that anyone who drives the vehicle is covered by liability insurance. Insurers offer higher coverage levels than the minimum required by law for a small premium surcharge. We recommend taking out a contract with high coverage, preferably at least 50 to 100 million euros. In the event of an accident, the insurer checks the claims made by accident victims and either defends or pays them, up to the amounts agreed in the insurance policy. However, there are circumstances where you have no insurance cover, such as in cases of damage caused intentionally or unlawfully.
When an accident occurs, the liability insurance checks whether the accident victims’ claims are justified. It then performs two tasks:
If the liability insurer considers the claims to be unjustified, it defends them at its own expense, if necessary also in court. Liability insurance thus 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 that the insurance company must pay to accident victims may include:
The insurer cannot refuse payment even in the event of gross negligence on the part of the person responsible for the accident. However, the insurer can claim up to 5000 euros from the driver for the following offences:
Comprehensive insurance provides coverage for damage, destruction, total loss, or loss of the vehicle and its accessories. The insurance company’s respective parts list includes accessories such as car radios, navigation devices, and aluminum rims. It is advisable to check if your costly accessories are covered in the protection.
If the vehicle incurs damages, comprehensive insurance reimburses repair costs, or in the case of total loss, the replacement value less the residual value of the vehicle. The residual value is determined by an expert, and scrap dealers may still pay a small amount for the accident vehicle. You are responsible for selling the vehicle and ensuring that the buyer pays the residual value amount.
The two types of comprehensive insurance
There are two types of motor vehicle insurance in Germany to consider. The first is partial comprehensive insurance, which covers damages caused by natural forces like fire, explosion, theft, storm, hail, lightning, and flood. This also includes collisions with animals and certain damages to accessories. However, damages to tires are not covered.
The second type of insurance is comprehensive insurance, which covers damages caused by others and accidents where you are at fault. This is recommended for expensive new cars and those financed or leased on credit. For older vehicles, partial comprehensive insurance may be a good option if you cannot afford a new car in the event of total loss.