Car insurance explained

Car insurance is required by law - this must be taken into account when taking out

Anyone who buys a new vehicle must have it insured. However, many do not know which insurance is compulsory. And which car insurance policies are optional. How many insurers are there and is it worth comparing car insurance? Here you will find the answers to these and other questions.

What car insurance are there?

The only legally required motor vehicle insurance is motor vehicle liability insurance. Vehicle owners are legally obliged to take out liability insurance for their vehicle with an insurance company. Without this insurance, no vehicle will be registered with the Road Traffic Office in Germany. It is therefore important that the insurance is agreed in writing with the insurer by means of a contract before approval. The insurance policy must be carried and presented when registering at the road traffic office. The obligation exists regardless of the ownership of the vehicle. Liability insurance for the motor vehicle is also mandatory for a leasing contract.

Motor vehicle owners can optionally take out comprehensive insurance. This is offered as comprehensive insurance and comprehensive insurance. Insurance coverage includes other benefits. Partial or fully comprehensive insurance for leased vehicles makes sense. Or, if it is a property vehicle, for high-quality vehicle models. A used low-priced vehicle does not necessarily have to be additionally insured.

Insurers are also happy to offer car accident insurance. As a rule, insurance is not necessary if there is a private accident insurance anyway. Too much car insurance can lead to overinsurance.

A vehicle protection letter is useful for all vehicle owners who often cross the state border. The letter of protection for the motor vehicle additionally protects vehicle owners abroad. Since the rights and obligations of car owners and drivers differ in other countries, the car protection certificate should be considered in any case.

What does car liability insurance cover?

Every vehicle owner must guarantee liability insurance for himself and all other people who drive the vehicle. If the father of the family is the owner of the vehicle, both use the vehicle and one of the children of legal age, all persons must be specified when taking out the insurance.

The legislator prescribes a minimum amount of cover, which is not sufficient in the event of an accident involving several parties. The result: the person who caused the accident must pay the difference from his own financial resources. In the event of an accident, however, property damage in the millions will quickly occur. Which is why it makes sense to set the real coverage amount to at least 50 million euros. The upper limit is 100 million euros.

In the event of an accident, liability insurance checks the claims of the accident victim. A distinction must be made between material damage and personal injury. In the event of an accident, damage to one or more vehicles does not always occur, but objects, real estate or similar that exist in the area are also often affected. With regard to personal injury, all persons who were injured by the accident are entitled to compensation from the insurance benefit. This also applies to people who are not in one of the accident vehicles, but also pedestrians, cyclists and others.

First, the car insurance companies clarify whether the person causing the accident considers the claims of the opponents to be justified. Different perceptions can arise between the insurer and the policyholder. If the insurance company is convinced that the claims based on the documents, such as the police accident report, are justified, the financial damage compensation will be carried out promptly. Regardless of whether the policyholder is convinced of his guilt. The compensation amount is based on the cover amount concluded or the underlying real value.

If the insurance company does not consider the claims to be justified, the policyholder can legally defend against the claims of the opponents of the accident. The car insurance companies provide passive help in the form of legal protection.

Motor vehicle liability insurance also applies if the person causing the accident acts with gross negligence. For example, drunk driving, driving without a license or in the event of an accident. The insurer can, however, claim up to 5.000 euros for the violation from the person who caused the accident.

As a rule, the following claims are legally valid for a motor vehicle liability insurance:
The loss of earnings for the time of treatment and recovery. A certificate of the victim is required.
Pain compensation for temporary damage.
Pension for permanent damage that leads to disability.
Compensation for property damage to the vehicle and other items affected.
Costs for a rental vehicle until the accident vehicle is restored.

There is no insurance protection from liability insurance in the event of willful and unlawful accidents.

What does comprehensive insurance cover?

If you are offered comprehensive insurance, you must know that due to the reduced value of a vehicle, it is not always worthwhile.

Partial insurance
The partial coverage within the car insurance covers vandalism, damage to game, vehicle theft, fire, natural forces and explosion. The damage may not be caused intentionally or unlawfully. In addition, the car insurance companies make sure that the vehicle is parked in a certain place when a vehicle owner is on his property and there is damage. For example, the clause in the insurance policy may stipulate that the vehicle must be parked in the garage. If the damage occurs in front of the garage, the insurance benefit is void.

Comprehensive insurance
Fully comprehensive insurance extends coverage. In addition, damage caused intentionally by third parties is also insured. Damage compensation also takes place if you, as the person causing the accident, damage your own vehicle.

What does accident insurance or occupant insurance cover?

Taking out accident insurance for motor vehicles depends on various factors. Both the place of residence, the age as well as the profession and regional conditions determine the amount of coverage. Parents can save if the vehicle for their own adult child is registered as a parent's second car. Small claims for damages should be taken over yourself, so there is a contribution discount. If the insurance covers the costs, they raise the premium.

All claims of the accident victim who suffer health damage from the accident are insured.

What does the vehicle protection letter insure?

The motor vehicle protection letter from motor vehicle insurance protects at home and abroad. In Germany, the protection letter covers costs for breakdown assistance. In addition, there are any overnight costs or travel costs for the return transport to the place of residence. Abroad, in addition to the clauses already mentioned, the insurance also covers repatriation, rescue costs, customs duties, expenses for a rental car in the event of a breakdown and returning children to their place of residence if one or both parents are unable to act due to damage.

A vehicle protection certificate is valid in the EU and the EEA.

How many car insurance companies are there in Germany?

According to Statista, there are around 89 insurance companies in Germany that offer car insurance. The insurers offer their insurance products with different options and clauses. The legal framework must be adhered to. You will notice that not every insurance is equally “good”, which is why it is worth researching beforehand.

There are also big differences in the amount of contributions. Consumer protection in Germany recommends carrying out an insurance comparison before taking out car insurance. This can often save several hundred euros a year without losing insurance cover. It is also worth changing the insurance if the insurance policy is still based on unfavorable old clauses.

There are various comparison portals for car insurance online. However, it should be noted that the comparison portals do not always list all insurance companies. Basically, only those are declared who agree to work with such comparison portals. If you want to compare all insurance offers, you can contact local consumer protection, who provide lists.

Tip: If you take out car insurance, make sure you pay attention to the payment options. The contribution rate is often higher if you agree on a monthly payment. It becomes cheaper if you make your insurance contribution every six months or annually.