Motor vehicle liability­insurance as a duty

Motor vehicle liability insurance is one of the very few private insurances in Germany that is, as it were, compulsory. All vehicle owners who drive their vehicles on the road must take out motor vehicle liability insurance. Due to the wide range of offers, it is extremely useful to compare the different insurers with each other. The most important thing is the cost, because in terms of benefits, the various motor liability insurance are very similar to identical.

What is motor vehicle liability insurance?

The motor vehicle liability insurance falls into the group of car insurances. Here it is one of three commonly used types of insurance, namely:

  • Motor vehicle liability insurance
  • Partial cover insurance
  • Fully comprehensive insurance

In the case of motor vehicle liability insurance, the insurer settles claims for damage culpably caused by the policyholder to other persons or property. So there is only a settlement of third-party damage. Both partial and fully comprehensive insurance, on the other hand, are designed to settle damages to the policyholder's own vehicle.

The fact that motor vehicle liability insurance is compulsory has mainly to do with the fact that injured parties should not be left sitting on their financial losses under certain circumstances. After all, by no means every perpetrator of damage has the possibility of paying five-, six- or even seven-figure sums in damages. Therefore, the motor vehicle liability insurance is a mandatory insurance in Germany and many other European countries.

What are the responsibilities of motor vehicle liability insurance?

The motor vehicle liability insurance has two main tasks, namely:

  1. Examination and, if necessary, defense of unjustified damage claims
  2. Settlement of claims

What many policyholders do not know: First of all, the motor vehicle liability insurance examines every claim for damages that is made to you as the vehicle owner or. directed to the insurance company. This means that, of course, from the point of view of the motor liability insurance, unjustified claims are not settled either. This task should not be underestimated, because you are usually at a financial disadvantage if the motor liability insurer would also settle unjustified claims. This will cause you to drop in the damage price class and you will have to pay a higher premium in the future.

The second main task of motor vehicle liability insurance is then to settle – justified – claims for damages. In plain language, this means that financial compensation is paid for the damage. Basically, three types of damage are regulated, namely:

  • Personal injury
  • Property damage
  • Property damage

Sometimes it can happen that the damage is settled against the injured party, but the insurer takes you into recourse. This is especially the case if you have acted with gross negligence or even intentionally.

What sum insured is recommended?

In motor liability 1 The best motor insurance 2022 – – Retrieved 08.11.22 one speaks less of the sum insured, but mostly of a coverage amount. This includes up to which amount incurred damages will be settled at all. Here you should definitely not choose a sum that is too low, because especially in the case of personal injury, damage sums in the six or even seven-digit range are not unusual.

Just imagine that you cause an accident and the injured party becomes permanently unable to work as a result. Then you would have to take over practically the entire loss of income for the next years or even decades. On this basis, it is easy to imagine that the sum can quickly exceed one million euros.

For this reason, the sum insured for personal injury and property damage should be at least five million euros. In most cases, insurers even specify a minimum coverage of ten million euros. Ideally, you should opt for an unlimited amount of coverage, so that all amounts of damage are completely covered. In the case of financial losses, the amount is usually much lower, because such financial losses rarely exceed 100 euros.000 euros.

What should I look out for when comparing?

As we mentioned at the beginning, the benefits of the different motor liability insurance policies are almost identical. Essentially, it is a matter of settling claims and checking beforehand whether the injured party's claim is justified. Therefore, when comparing the offers, it is primarily a matter of finding the cheapest insurance possible. This brings us to the question of what factors influence the premium for motor vehicle liability insurance, because there are several of them.

What is the insurance premium based on??

Compulsory motor vehicle liability insurance - benefits similar, costs different

There are a number of influencing factors that affect the premium for motor vehicle liability insurance. In this context, one often speaks of two groups, namely the hard and soft factors. You can only slightly influence the hard factors and/or these have a relatively high share in how the insurance premium turns out to be. These include first and foremost:

  • Regional class
  • Type class
  • No-claims bonus class

With the type class is meant, which vehicle model you drive. Since different types of vehicles are also affected by damage with different frequency, the insurance company is concerned with making a subdivision here. Similarly, the regional class, which is where your vehicle is registered.

You have a greater influence on the no-claims bonus class. All policyholders are classified in this category, whereby it is a question of how long you have been accident- or damage-free. is on the road without any damage. New drivers, for example, are often classified with a premium rate of over 200 percent. On the other hand, those who have been damage-free for decades, for example, pay a premium rate of 60 percent or less.

A major advantage of the no-claims class is that accident-free driving gradually reduces premiums. The disadvantage is that you are usually downgraded after a culpably caused accident, so you have to pay a higher insurance premium accordingly.

You can influence a number of factors in your motor vehicle liability insurance that affect the insurance premium. In any case, the information you provide should be truthful, i.e. you should not, for example, state significantly fewer kilometers than you actually drive per year.

The soft factors in motor vehicle liability

In addition to these hard factors, there are a number of soft factors that also affect – albeit to a lesser extent – the insurance premium to be paid. This includes first and foremost:

  • Number of drivers
  • Age of the driver
  • Place of accommodation of the vehicle overnight
  • Annual mileage in kilometers
  • Additional services such as international cover

There is also savings potential for you in these soft factors if you can adjust your corresponding (driving) behavior. The number of drivers is about the fact that there is naturally a higher risk with more drivers. It is particularly disadvantageous if there are one or more drivers under the age of 25, because in this case the insurance company classifies the accident risk as statistically higher. You should therefore make sure that you always keep the information up to date and that your nineteen-year-old son is not still listed as a driver, even though he has had his own car for some time.

The fact that the annual mileage has an effect on the insurance premium is also understandable. The more often you drive your car and the more kilometers you cover, the higher the risk of accidents and damage, statistically speaking.

More and more car insurers now also offer a telematics tariff. You can also save money here if you have a device installed in your vehicle that is a kind of black box and records the driving characteristics and your driving behavior. However, you will usually only benefit from this thematic tariff if you drive very carefully and do not stand out due to less than considerate driving behavior.

When can I change my motor vehicle liability insurance?

It is advisable to make an insurance comparison at regular intervals, because the differences between the insurance companies can amount to more than 100 euros in premiums per year. However, you can usually only change your motor vehicle liability insurance at the end of the year, because the contract usually always expires on the first day of the year. January extended by another year.

However, the insurance company must receive notice of termination no later than 30. November are present. In this case you would exercise your ordinary right of cancellation. In addition, there is the possibility to terminate the motor vehicle liability insurance extraordinarily and thus immediately. This is possible especially under the following conditions:

  • Current claim (usually up to one month after settlement)
  • Change of vehicle
  • Premium increase by insurer (announced)

When switching, you should make sure that the transition is smooth and that you are not completely without protection by the motor vehicle liability insurance for several days or even weeks.

Direct insurers often particularly favorable

Since it therefore depends with the comparison of the motor vehicle liability insurances predominantly on the premium which can be paid, you should compare the offers before the conclusion of the insurance and likewise before a possible change. It will turn out that especially the direct insurers are particularly favorable. They don't have a branch network, as is still the case with many long-established insurers, for example. This cost saving is often passed on to the customer, namely in the form of slightly lower premiums.

Direct deposit underwriters are basically only less suitable if you want personal contact with your contact person. This can be especially profitable in the case of claims, because then not infrequently a certain discretion plays quite a role. However, the corresponding employee usually only has this if, for example, you have been a customer there for many years and are also more or less known personally. This will rarely be the case with direct insurers, so this may well be an argument in favor of insurance companies with branch offices – despite a premium that may be heard.

Conclusion on motor vehicle liability

Motor vehicle liability insurance is a very important insurance and is therefore one of the very few compulsory private insurances, and not for nothing. Every motor vehicle owner is required to obtain motor vehicle liability insurance before being allowed to move his or her vehicle in the public domain. The premiums depend on several factors, some of which you can influence. A comparison of offers is definitely advisable, because in the best case, you can also save more than 100 euros per year on motor liability insurance – sometimes in combination with partial or comprehensive insurance.

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