Third-party liability insurance

What drivers need to know about third-party liability insurance in Germany

These are the basics drivers need to know about third-party liability insurance in Germany:

By law, every car needs liability insurance when it is on the road.
Liability insurance compensates the victim of an accident and covers personal injury, vehicle damage and other property damage.
Damage to your own car is covered by partial or fully comprehensive insurance, which is voluntary.
Liability insurance is the simplest type of policy.

Liability insurance is a must for every vehicle on the road

Liability insurance is compulsory for every car on the road. These include cars, motorbikes, quads, mopeds, buses and tractors.

Driving a car without liability insurance is a criminal offence in Germany. When you register your car, you have to prove you hold liability insurance. Because of this it is possible to take out basic liability insurance even if you have low or no credit score. Insurers are subject to the “obligation to contract”: Insurers must generally accept your application for liability insurance. They may only refuse to cover you under certain conditions.

Benefits of liability insurance

Liability insurance provides coverage if the insured vehicle causes damage. In the case of damage claims, liability insurance covers damages to third parties and their vehicles. These include:

Personal injury	Vehicle damages	Other property damage	Financial losses
Medical expenses	Towing costs	Damage to buildings	Financial loss, e.g. “parking” prevents someone from using a service that had already been paid for
Loss of earnings	Expert costs	Transport facilities
Compensation for pain/suffering	Repair costs	Field damages
Retirement	Loss of use
Funeral expenses	Rental car costs
Survivor benefit	Depreciation in value
Reintegration costs	Replacement value in case of total loss
	Registration and deregistration costs
	Legal fees

Who can make claims to liability insurance?

In addition to the injured parties involved in the accident, indirect parties also recover their expenses from the insurer, for example:

Health insurance company
Accident & pension insurance
Employer

How much does the insurer pay out?

The “sum insured” determines the amount an insurer will pay out to an injured party. The following minimum insurance amounts are prescribed by law:

Personal injury: up to 7.5 million Euro
Property damage: up to 1.22 million Euro
Financial losses: up to 50,000 Euro

These are the lowest amounts an insurer can offer. A sum of 100 million Euros is advantageous for liability insurance.

When does liability insurance not pay?

In certain circumstances, liability insurance is not obliged to pay for damage.

Breach of obligations

Insured persons must comply with certain obligations. If they violate these obligations as an insured person, the insurance company may refuse protection in whole or in part.
Violations of obligations are, for example:

Hit and run
Participation in illegal car races

Recklessness

In the case of damage caused by negligence, the insurer has the right not to pay out, or only pay partially.
Gross negligence, for example:

Running through red traffic lights
Using a phone while driving
Accidents that occur under the influence of alcohol or drugs are not covered by car insurance.

Recourse claims

If an accident occurs as a result of gross negligence, the insurer will usually pay for the damage for the time being in order to protect injured third parties. The insurance company effectively pays in advance and can then demand the money back from the insured person. In legal terms, the insurance company takes the person into recourse.

Claims of recourse are legally limited to 5,000 Euro per infringement.

Additional coverage

In addition to third-party liability insurance drivers can take out partial or fully comprehensive insurance. These add-on insurances are voluntary and offer much broader protection.