Here's what you need to know about car insurance

Finding an affordable and effective car insurance policy is straightforward if you know what’s important. There are mandatory motor liability insurance, partial cover (Teilkasko), comprehensive cover (Vollkasko), and certain special services. Our guide will help you understand what to look for when choosing the right car insurance.

What you should know!

Motor liability insurance

is legally required for registering a car.

The cost of motor liability insurance depends on various factors such as the driver’s age and claim-free years (SF years), the type of car, and the planned mileage.

In addition to motor liability insurance, you can opt for partial or comprehensive cover. Partial cover protects you mainly against theft or fire. Comprehensive cover protects you against damages you cause yourself or from vandalism.

How to Proceed

-Consider what type of car insurance you need: Partial or comprehensive cover is particularly worth it if you use your car daily and could not afford potential damages yourself.

– Perform a thorough comparison using comparison portals like Check24, Verivox, or HUK24.

– It can be beneficial to switch car insurance occasionally due to the competitive market often offering special deals for new insurance contracts, especially before November 30th each year, which is the annual deadline for canceling car insurance.

Types of Car insurance

You’ve likely heard of the three main types of car insurance

Motor liability insurance

Partial cover insurance

Comprehensive cover insurance

Motor liability is the only car insurance you legally must have to drive a car. All additional insurance services are optional. It might even be worthwhile to have only liability insurance, especially if a repair in case of damage would not financially burden you.

Motor Liability Insurance – Legally Required

You can’t skip motor liability insurance. In Germany, it’s a prerequisite for the registration of any car. You must have it before you can register the car.

Protecting other road users with Motor liability Insurance

This insurance does not protect you or your car but other road users. If you cause an accident, your motor liability insurance covers property and personal damage incurred by others. For example, the repair of the other car or medical costs of the occupants are covered not by you as the accident causer but by your motor liability insurance. Conversely, the insurance of the other car owner pays if you are the victim. If you cause damage to your own car, it is not covered by motor liability insurance. That’s what other car insurances are for. The premium for motor liability insurance can vary greatly. Even though it is a legally required insurance, insurance companies are quite free in setting the prices. Various factors typically play a role in the rates, which are based on the insurance holder and the insured vehicle. These include the most important factors:

– Age of the insurance holder
– Age of the vehicle
– Driving experience
– Annual mileage

Moreover, insurances classify car models into specific type classes. These are usually determined by statistical data such as the number of accidents and repair costs for a particular vehicle type. Vehicles that are statistically less likely to be reported for damage are cheaper to insure.

Costs of Car Insurance

Before buying a car, it might be worth looking into the type class to inform yourself about the mandatory motor insurance. To find out the type class of your vehicle, you can use various online sites. A comprehensive database, for example, is provided by the consumer portal of the GDV. By entering your car model, you can quickly and easily check how it is classified and how expensive the car insurance will be accordingly.

Partial Cover – Against Theft, Fire & Co.

Partial cover is a voluntary car insurance that protects your car. Unlike comprehensive cover, the type of damages covered mainly include those not caused by the driver. These damages are covered by most insurance services:

– Theft of the car or car parts
– Fires and explosions
– Glass breakage
– Damage to cables from martens
– Wildlife accidents (usually only covering wild animals like deer, wild boars, foxes, etc.)

It’s important that the coverage is only provided under certain conditions which differ from insurance to insurance. So, when choosing a provider, it’s always worth reading the fine print. A marten damage, for example, is covered by most insurance companies under partial cover. However, sometimes only the immediate damage is insured, such as the bitten or chewed wiring. If this results in engine damage, it is considered a consequential damage and is not necessarily included.

Partial Cover Insurance

Partial cover insurance generally covers the current value of the car in case of damage. This value decreases significantly in the first months after purchasing a new car. For older vehicles, it may happen that a repair would cost more than the car is worth. This should be considered both when choosing partial cover and when deciding whether the insurance is worth it for your car at all.

When does Partial Cover Insurance make sense?

When deciding for or against partial cover, you should mainly estimate your financial capabilities. If your car is in its middle years, i.e., 5-8 years old, and you are not sure if you could afford repairs in case of damage, partial cover insurance definitely makes sense. If you could easily pay for damages yourself in case of an accident, you should consider saving both the time invested in comparing car insurance and the contribution and instead bear the risk of damage yourself. However, if you have an expensive new car or are leasing a vehicle, you might need protection with more comprehensive insurance services than partial cover.

Comprehensive Cover – Against Self-Inflicted Damages

Comprehensive cover is not legally required. Primarily, this insurance is intended to cover damages you cause to your own car. It also includes all services of partial cover, so you never have both partial cover and comprehensive cover; you either have one, the other, or none. Comprehensive cover insures besides self-inflicted damage also damage cases not covered by partial cover. Insured with a comprehensive cover are:

– Self-inflicted damages
– Damages caused by others if the accident causer commits hit-and-run, is insolvent or uninsured
– Vandalism
– All services of partial cover insurance.

For instance, if someone kicks off your car’s mirror or scratches the hood, most comprehensive cover providers will pay, but not partial cover. A significant exception that almost no comprehensive cover insurance includes is burst tires, even if they were slashed. This damage is usually only replaced if other parts of the vehicle were also affected by vandalism. Some comprehensive cover insurances also cover special services that are either included or can be booked as an addition. Thus, even with a comprehensive coverage like comprehensive cover, it is worth looking into the fine print.

When does Comprehensive Cover Insurance make sense?

Those who want to be on the safe side with car insurance should opt for comprehensive cover insurance, especially with a new vehicle. Most cars benefit from the all-around protection up to the age of about 5 years. Comprehensive cover also makes sense if you drive a particularly valuable car like a classic car.


When deciding whether partial or comprehensive cover is worth it for you, it depends both on your financial situation and the age of the car. The insurance always reimburses the current value in the event of damage, not the new value the vehicle once had. For instance, a new car, for which comprehensive cover is often chosen, loses value over time, so it is sensible to assess after a few years of use whether the insurance is still worth it.

Which (additional) services are important in a Car insurance?

Depending on the tariff of the car insurance, it may be sensible to book some services in addition to the given conditions. Which are worth it can also partly depend on your driving habits. Below we have summarized the most important services for you.

Coverage Sum

The coverage sums for motor liability insurance are set by the legislator and are 7.5 million euros for personal injuries, 1.22 million euros for property damage, and 50,000 euros for pure financial losses (as of 11/2020). Although it rarely happens, there are accidents where the damage to be compensated exceeds these sums. Many insurances offer an increase in this sum as a bookable service.

Rental Car

If you rent a car, your liability insurance does not apply. Instead, you can either take out insurance with the car rental company or secure yourself with the Mallorca policy. It functions similarly to liability insurance. More on this in the section “Additional services.” Apart from this, it is also possible to get a free rental car through the car insurance if your own vehicle needs to be repaired after an accident. Whether such an additional service is worth it for you depends on how much you rely on your car.

Foreign Damage Protection

For regular trips with your own vehicle abroad, it may be advisable to take out foreign damage protection. In some motor liability insurances, this service is already included in the regular tariff. The car insurance takes effect in case of non-fault accidents and covers, for example, the difference if the coverage sum of the accident causer is insufficient.

Gross Negligence

In the case of self-caused accidents, the insured may be accused of gross negligence. This can quickly lead to the insurance coverage not applying. If you book the corresponding service, insurance companies agree to waive this objection. This means you are also insured if you, for example, drive through a stop sign and similar situations. There are no insurance policies and no additional clauses that cover damages due to the influence of alcohol and drugs.

New Value Compensation

If you agree on new value compensation within the scope of comprehensive or partial cover, the car is to be completely replaced by the insurer in the event of damage for a certain period from the first registration. This applies both to theft and to total loss. The covered period is particularly relevant here. Often, the additional coverage for 6 months is quite expensive compared to the risk of an accident. It is worth looking for a provider that offers new value compensation for 12 or even up to 24 months, as a new car loses considerable value during this time. Some car insurances offer equivalent protection for used cars. In this case, the purchase price is compensated.

Consequential Damages

Some damage cases covered by car insurance can cause consequential damages that are not automatically compensated. For example, if an animal damages the hose, this can lead to engine damage. However, the partial cover only covers the hose. It is therefore sensible to also insure the consequential damage.


Wild accidents are always only insured against wild animals such as deer and wild boars in partial cover. In accidents with cows, horses, or often even with squirrels, although they are classified as wild animals, the insurance does not pay. At least not without an appropriate additional service. There are both additional clauses for certain animal species and for any animal accidents, including farm and domestic animals.


This service allows the policyholder to decide within a certain period to pay for damage out of pocket after all. This is mainly to avoid a downgrade of the no-claims bonus (SF class), which would increase the regular insurance amount.

Driver Protection

By motor liability insurance, other road users (passengers) are covered, not the driver himself. With driver protection, the car insurance also compensates the driver of the car, for example for pain and suffering and loss of earnings. The additional service makes sense mostly if you do not have private accident insurance.

Mallorca Policy

With the additional provision, insurance benefits also apply when driving a rental car abroad. Some providers allow the insurance to be taken out even if you do not have a private car. Coverage sums abroad are often significantly lower. In the event of an accident that was not your fault, it may happen that the insurance of the accident causer does not cover everything. In this case, the Mallorca policy applies.

Car Protection Letter

The protection letter can contain different services. Especially towing the car in case of a breakdown is often included. For this, there are special service numbers that ensure a nearby workshop comes out, even away from your own home. Sometimes, the repatriation of the vehicle or even the provision of a free rental car is included. When checking the conditions, you should especially ensure that the protection applies abroad according to your needs. Here, the services within and outside the EU countries also differ.

Car Insurance Comparison: Which Car Insurance Fits You?

The first important decision is to determine whether partial cover, comprehensive cover, or no additional insurance makes sense for you. You might also be best off taking some additional services like the Mallorca policy or a car protection letter.
To find out which insurance makes sense for you, you can ask yourself 3 questions:

Could I pay for the repairs myself?

If an actual damage case occurs: Do you have sufficient financial reserves to cover possible damages that would otherwise be taken over by partial or comprehensive cover? If even larger repairs would not financially burden you, it might make sense not to pay for insurance but instead to take the risk of damage.

How "valuable" is my car?

For everyone who could not easily afford repairs, the question arises whether it should rather be partial or comprehensive cover. The all-around protection of comprehensive cover is especially popular with new or only a few years old vehicles. From a vehicle age of about 5 years, it is usually more sensible to only take out partial cover, as the current value of the vehicle significantly decreases.

How urgently do I need the car?

The type of insurance is also crucial depending on how urgently the vehicle is needed daily. For example, if there is no option to do without the car for a few days in the worst case, this problem should already be covered with an option for a rental car in the protection letter.

Switching Car Insurance, is it Worth it?

Many factors that influence the premium of car insurance can change over time, such as an available garage parking space, the current value of the vehicle, or simply your own age and SF years. Therefore, a car insurance comparison can always be worthwhile again.


If you plan to switch your car insurance, you should definitely deal with the insurances that come into question in October or November. Because November 30th is the annual deadline. If the cancellation is at your insurance company by this day, you will benefit from your new car insurance from January 1st of the new year. Car insurance comparisons are also particularly interesting in these months. Because the providers are in a real competition to undercut each other and make this known in large advertising campaigns. As a new customer, you can benefit from many discounts, and under certain conditions, comprehensive cover insurance may even be cheaper than partial cover. So definitely wait for these months to catch particularly favorable prices as well as the perfect cancellation timing. Although it is worth making a comparison of car insurances every few years, we advise against investing time in it annually. Within one year, the factors and prices usually do not change so drastically that the effort pays off.

Frequently Asked Questions

The most important car insurance is motor liability insurance, as it is legally required. In addition, you have the option to voluntarily take out casco insurance and various additional services.

Partial cover insurance covers damages that you did not cause yourself. These include elemental damages, marten damages, or theft.

Comprehensive insurance protects against damages caused by influences such as storms, wildlife accidents, & Co. as well as damages caused by the driver himself. Comprehensive insurance includes the services of partial cover.

Various factors can make car insurance more expensive. These include, for example, a particularly young or old age of the driver, a large circle of drivers, and repeated claims.
If you deregister your vehicle at the registration office, the insurance company is automatically informed. If you do not register a new car within 2 weeks thereafter, your contract goes into a dormant phase for up to 18 months.
Comprehensive insurance is especially worthwhile for newer vehicles as it offers comprehensive protection against various damages. It also makes sense if you are highly dependent on your vehicle.
Comprehensive insurance also covers damages caused by your own fault. In the case of grossly negligent driving behavior, for example, running a red light, the insurance can object. You can counteract this with an additional service. Car insurances do not pay if the driver was under the influence of alcohol and drugs.
For the insurance, your ID card or passport as well as the vehicle registration certificate part I and your driver’s license are needed. In addition, you must answer various questions, for example, about the circle of drivers, estimated kilometers driven, and more.
Older vehicles statistically represent a higher safety risk on the road.
The switch takes place on January 1st of the new year. To ensure everything runs smoothly, the old contract should be canceled by November 30th.
The deadline for the receipt of your cancellation is November 30th if you want to switch. If you deregister a car, you can cancel at any time.
This depends on the insurance offers and some other factors. If your vehicle is already a few years old, it may make sense from about 6 to 8 years to switch from comprehensive to partial cover.
If your vehicle’s type class is upgraded or the insurance increases your contribution, an extraordinary cancellation may be possible. Otherwise, your cancellation should be at the insurer by November 30th.


Expert Guidance

Our experts tailor advice to your unique situation, helping you understand various policies and what they cover.

Customized Solutions

We negotiate the best terms with over 500 partner banks to ensure you receive coverage that fits your needs and budget.

Transparent Pricing

Clear cost structures with no hidden fees.

Get Insured with Confidence

Ready to take the next step? Contact AIVADO today for a personal consultation. Secure your peace of mind on the road with the right car insurance tailored just for you.

Our Partners