Every year at the end of the year comes the changing season for car insurance. But in which cases is it actually worth changing?
Motor vehicle liability insurance is mandatory
In Germany, car insurance is required by law. Every vehicle owner must have motor vehicle liability insurance in order for their car to be registered. The compulsory insurance must cover personal injuries up to at least 7.5 million euros, property damage up to 1.22 million euros and financial losses up to 50,000 euros. Most insurance companies cover these amounts of damage or offer a corresponding policy that includes higher coverage amounts for a small surcharge. However, your own car is not insured by motor vehicle liability insurance and in most cases it is advisable to take out additional comprehensive insurance. You can choose between partially comprehensive and fully comprehensive tariffs. As every year, the changing season for car insurance starts at the end of the year and customers can cancel their contracts by November 30th and take out more suitable or cheaper insurance for their vehicle. We will tell you who really needs fully comprehensive insurance, in which cases it is better to resort to partially comprehensive insurance and when liability insurance is sufficient.
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Fully comprehensive or partial comprehensive?
In most cases, whether partial or fully comprehensive insurance makes more sense for the insured person depends on the vehicle. As a rule, however, fully comprehensive insurance is recommended for new cars for up to five years, while after that, partial comprehensive insurance is often completely sufficient. However, if your car is a little older and only has a low value, it is better to forego comprehensive insurance altogether. The insurance conditions for partial comprehensive insurance often stipulate that in the event of damage, only the current value, i.e. the exact amount that your car is still worth at the time, will be replaced. This is lower the older the car and the worse its condition. Therefore, in most cases, comprehensive insurance is not recommended for very old vehicles and it is sufficient to take out motor vehicle liability insurance. However, vehicles whose current value could even increase (e.g. vintage cars) should of course be considered an exception.
Many car owners are now using the changing season to switch from more expensive fully comprehensive insurance to cheaper partially comprehensive insurance. However, it is advisable to check beforehand whether the existing no-claims discount speaks in favor of continuing to have fully comprehensive insurance and not switching. Partial comprehensive insurance does not include a no-claims discount. The no-claims class is one of the features in motor vehicle insurance that significantly influences the amount of the premium. The longer you travel as a driver without using your provider, the more the insurance company will reward you with a discount.
Before you take out insurance, you should do your research, as the difference in premiums between fully and partially comprehensive insurance is often smaller than many drivers assume. Depending on the vehicle type, the owner’s place of residence and the no-claims category, the prices vary slightly and are often close to each other. If you finance a car through leasing or a loan, it is always advisable to take out fully comprehensive insurance. Be sure to compare the rates on more than one online comparison portal beforehand in order to find the right insurance for you.
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Isabell Tonnius / editorial team finanzen.net
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