Car insurance: What you need to know

by Admin | January 14, 2023
Car insurance: What you need to know

What is mandatory for every vehicle owner?

As the owner of a motor vehicle or trailer, you are obliged to take out motor vehicle liability insurance in accordance with § 1 PflVG. This means that you are not allowed to drive a motorized vehicle on the road without it. When driving a vehicle it is not impossible that mistakes happen and lead to accidents. If you cause a traffic accident with your car and cause damage to someone else, you have to pay for it.

Liability therefore means the obligation to pay damages. Since this can quickly turn out to be very high, liability insurance protects you from having to pay for any personal injury, property damage and financial losses from your private assets. A brief digression: personal injury refers to injuries or death, and property damage refers to damaged objects of all kinds. Property damage usually means financial losses resulting from loss of use or earnings.

What does a car insurance cover?

Motor vehicle insurance comprises several components: motor vehicle liability insurance, partial and fully comprehensive insurance, and additional vehicle insurance. So when you talk about your car insurance, you mean a combination of these insurances. If not, you now know that motor vehicle insurance does not refer to your partial cover insurance alone. By the way, the term motor vehicle does not only include your car. Motorcycle, quad bike, moped, bus, caravan and tractor are also included in the term.


Your liability pays for the damages of the other party in case of an accident caused by you. If you cause a traffic accident, you do not have to pay for any personal injury, property damage or financial losses from your private assets. However, only if you have taken out a liability insurance policy with a high coverage amount. If the cost of the accident is more than what your insurance covers, you must pay the difference. However, this is very rare, because in good contracts a very high coverage amount is agreed upon.

The benefits of a car insurance at a glance:

Assumption of towing costs, repair costs, expert's fees, loss of use, depreciation, registration and deregistration costs, replacement value in case of total loss for the vehicle of the other party involved in the accident.
Assumption of damages to buildings and traffic facilities
Assumption of treatment costs, lawyer's fees, loss of earnings, compensation for pain and suffering, pension, funeral costs, survivor's benefits for the other party involved in the accident
Defense against unjustified or excessive claims

Comprehensive insurance

If additional security is required, it is advisable to take out comprehensive insurance. The comprehensive insurance pays for damages to your own vehicle. You can therefore extend your insurance cover by taking out comprehensive insurance in addition to the legally required liability insurance.

Comprehensive insurance covers damage to your vehicle caused by you, provided that you did not cause it by gross negligence or intentionally. The insurance covers the costs of repairs after an accident and also if you hit something when parking or backing out of a parking space.

The fully comprehensive insurance covers all services of the partial comprehensive insurance, pays for all damages that you cause yourself and if your vehicle has been wilfully damaged by vandalism. If the other party involved in the accident is in a hit-and-run, comprehensive insurance also pays for all damage to your vehicle. Regardless of whether the other party can be held liable or not.

However, the fully comprehensive insurance does not usually pay:

  • in the case of damage caused by driving errors to a caravan that you have coupled to your car
  • in case of accident damage between a towing and towed vehicle
  • if you have intentionally or grossly negligently caused damage while under the influence of drugs or alcohol
  • in the case of damage caused when you were racing
  • in case of damage caused by disregarding traffic regulations or excessive speed
  • if you drive your vehicle without a valid MOT and know about a defect
  • if you did not change worn tires and it can be proven that the reported damage was caused by this negligence
  • Carsten Schröder - motor vehicle expert from Volders.co.uk
  • By the way, if you transport objects in your car, your comprehensive insurance will not take effect if they are damaged in an accident, but your household contents insurance or a transport insurance.
  • If your vehicle is stolen or damaged to such an extent that it is a total loss, the insurance company will only pay you a replacement value, but not the new value of your vehicle. The replacement value is the current value of your vehicle immediately before the damage. The value of your vehicle also determines the payment of repair costs. The comprehensive insurance covers the repair after an accident completely, provided that the repair costs do not exceed the residual value of your vehicle.
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