It is compulsory to have at least third party insurance for your vehicle in Germany. In fact, it is impossible to register your vehicle without proof of insurance. Your chosen insurance company will issue you with a code (EVB Number). The vehicle registration office can check online using the code to see if the car has a valid insurance.
The Main Kinds of Vehicle Insurance Cover Available
This is the minimum requirement for you to register and legally drive a vehicle in Germany (and the EU). It is designed to cover costs that arise through an accident causing damage to a third-party when the accident is your fault and you are liable to pay for the damages. It does not cover any damage that has been sustained by your vehicle.
Third-Party Fire & Theft (Teilkaskoversicherung)
This is a complimentary insurance to your third-party insurance. It covers damage to your own vehicle arising through fires and explosions, theft of your vehicle (or parts), broken windscreens and windows, electrical short circuits, damage through martens, accidents with game (wild) animals and damage due to storms, hail, lightening and flooding. There are differences in the cover offered by different insurance companies – the basic rule is that the more cover they offer the more expensive the premiums are. It is important that you choose the amount of cover that could apply to you.
Full Comprehensive (Vollkaskoversicherung)
This is also complimentary to your third-party and fire & theft insurance. It offers you insurance cover for vandalism through a third-party and for the costs that incur to repair the damage to your vehicle if an accident was your fault.
How the Premiums are Calculated
The German vehicle insurance works with a system on no claims bonus (Schadenfreiheitsrabatt ‘SFR’), meaning the longer you drive without having an accident, the cheaper your insurance becomes. A similar system is in place throughout Europe and you can bring your no claims bonus with you from several countries (EU, USA, Canada, Japan and Australia). Some insurance companies will accept documents (in German or English and can be handed in at a later date) from insurance companies from Eastern Europe and Russia. These must state the number of accident free years amassed and the individual companies will then decide how much no claims bonus to award. For every year you drive accident free, your no claims bonus rises. Should you have an accident, your no claims bonus will be reduced.
If you have held an EU license for less than 3 years, most insurance companies will class you as a 0, once you have held a license (accident free) for 3 years, you are classed as a 1/2. After another accident free year you will be classed as a 1 and so on. The amount of no claims bonus you have gathered has a massive effect on the premium you will pay.
There are of course other factors that influence your premiums; these vary depending on the insurance cover you choose. Major factors include the area where your vehicle is registered, the type of vehicle you register, age of registered drivers, where the vehicle is parked overnight, points on license and kms driven per year.