Whether car, truck or motorbike - no motorised vehicle is allowed on the road without liability insurance. Third party liability cover is essential so that in the event of an accident, the victim can be adequately compensated.

Motor third party liability pays for any damage you cause to others while using your vehicle. This can be loss of earnings, compensation for pain and suffering or, in the case of permanent damage to health, a lifelong pension.

Of course, the costs for towing and repair or the replacement costs for the vehicle of the other party at fault are also insured. If the injured party needs a rental car during the repair period, this will also be paid for by the motor vehicle liability of the party at fault within certain limits.

High coverage amounts in the event of damage
In addition, the liability insurance generally checks whether the accident victim's claims are justified - it fends off unjustified or excessive claims by legal means.

The legislator stipulates 7.5 million euros per person as the minimum sum insured in motor vehicle liability insurance. Property damage must be insured up to 1.12 million euros, financial loss up to 50,000 euros. In practice, however, the contractual sums insured by insurers are significantly higher.

Partial cover insurance
Partial accidental damage insurance covers damage to your own vehicle caused by theft, fire, bad weather, collision with game or glass breakage. In addition, the standard accessories of your car are also insured, e.g. in the event of theft or destruction. You can find out what accessories are included in individual cases in the insurance conditions.

Some insurers also cover the increasingly frequent damage caused by marten bites. Tip: You can reduce your premium by taking out partial cover insurance with an excess in the event of damage.

Fully comprehensive insurance also pays for self-inflicted damage
Comprehensive insurance basically covers all damage to your vehicle, including damage caused by an accident you caused yourself. Damage caused by vandalism, such as scratched paint or dented doors, is also covered by your comprehensive insurance.

If you make a claim on your comprehensive motor insurance - and not for partial cover damage - your insurance policy will be downgraded, and the premium will increase the following year as a result. As in partial casco, deductibles are also common in comprehensive insurance. Because of the comparatively high premium, fully comprehensive insurance is worthwhile especially for new vehicles.

Type classes in third-party liability, partial and fully comprehensive insurance
The premiums for motor vehicle insurance are initially calculated according to the type of vehicle. Each vehicle is assigned to a specific type class in third-party liability and two further type classes for partial and fully comprehensive insurance.

These type classes reflect the claims history of the various vehicles over the past years. The lower the type class of your vehicle, the lower the premium.

The place of residence also has an influence on the premium. The premium amount for motor vehicle insurance also depends on where you live - the different regional classes are based on the claims history in the individual German registration districts. The regional statistics for comprehensive insurance also take into account local characteristics such as flooding, hail or the frequency of theft.

The reclassification into more favourable or more expensive regional classes takes place every 1st October. However, about two thirds of all contracts remain unaffected each year.

Beginners at the wheel pay higher premiums for motor vehicle liability and comprehensive insurance than "old hands" who have been driving accident-free for many years. If you do not claim on your insurance for a long time, the premium drops considerably. Drivers who have been accident-free for many years only pay 20 percent in the best case.

Pay for minor damage yourself?
No-claims classes and downgrading rules can differ between insurers. By the way, downgrading can be avoided if you pay for small damages out of your own pocket - because it is not the amount of damage, but only the number of damages caused that determines the discount.

Your insurer will tell you whether it is worth your while to pay for minor damage yourself. Some insurers offer so-called discount savers - so that the first accident does not immediately mean a downgrade to a more expensive discount level.

Lower premiums for second cars
Because novice drivers cause accidents more often than experienced drivers, motor vehicle liability insurers charge them premium rates of up to 300 percent. However, a few tricks can save a lot of money.

The first option is to have your parents register the vehicle as a second car. This way you start with a significantly lower premium rate. The premium discount acquired over time with the second vehicle can be transferred to you later. Many companies also grant lower entry rates if a family member already has a vehicle insured with the company. 

Another possibility: many insurers offer favourable rates for new drivers who have already insured a moped or a small motorbike with them.

Use seasonal licence plates
Summertime is convertible time. If you want to drive open and save money, you can use a seasonal licence plate. You then only pay the motor vehicle insurance for the period in which your vehicle is registered. If your car is on the road for more than six months per year, your no-claims bonus will continue to grow.

Vehicle tax is also waived during the rest months. If the vehicle is completely deregistered in the autumn, the no-claims bonus achieved is usually retained if you register it again within eighteen months - until then, most insurers offer a non-contributory rest insurance.