Third-party Liability Car Insurance

Insurance is not rocket science. We explain everything you need to know about third-party liability in this glossary article.

What is third-party liability car insurance?

Third-party liability car insurance is mandatory in Germany. Without this insurance, you are not allowed to drive your car. It supports you financially should you cause damage to someone else, their property, or assets. However, it does not cover damage you cause to your own vehicle.

What does third party liability cover?

Third-party liability insurance supports you if you cause an accident that results in personal injury, property damage or financial loss to third parties. But what does that mean exactly? Here are some examples:

Damage to someone else:

You ignore somebody's right of way. This causes an accident in which the other driver is injured. Third-party liability insurance covers the costs of medical treatment.

Damage to someone else's property:

When parking, you accidentally hit the car next to you, causing scratches and dents to the other vehicle. Fortunately, your third-party liability insurance covers the repair costs.

Financial loss:

You cause an accident in which another person is injured. Because of this accident and the resulting injuries, this person cannot work for some time – resulting in financial loss. Third-party liability insurance will cover the compensation.

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Who should get third-party liability?

Third-party liability is mandatory for anyone who drives in Germany. Without it, you cannot legally drive on the roads. Third-party liability offers the least protection, but it's also typically the cheapest policy. If you don't have a valuable car and don't want to spend a lot on insuring it, third-party liability is likely the best policy.

Does third-party liability have bonus-malus classes?

Yes. As third-party liability covers you for damage you cause to others and yourself, you receive a better bonus-malus class for each year that you don't cause an accident or claim.

What does third-party liability insurance cost?

The premium for third-party liability insurance is calculated individually and depends on several factors. Your place of residence and age, the bonus-malus class as well as the type and regional class influence the price of your insurance, for example. In addition, the price of your car insurance also depends on the level of cover you want and the additional benefits. Click here to find out how the price of your car insurance is calculated.

When can I cancel my third-party liability insurance?

You can cancel your car insurance until the deadline on 30th November. If you exceed this deadline, you can make use of your special right to termination and, under certain conditions, also cancel outside the switching season.

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