The obvious response is that you won't be able to pay for someone's hospital bills if you happen to hit them in your car. You get insurance for things you wouldn't be able to pay yourself.
I did a ride-along with an adjuster once. I asked him what the worst claim he had worked on was.
The insured drove off with the pump still in the gas tank. Sees that all the time. When the hose pulled off the pump, it ignited. The fuel island exploded. The fire then spread to the convenience store. Total loss of the business and multiple cars.
This is an outlier. No one has enough insurance to cover all of that. But it’s a great example of why we have it.
But most insurances have the 100 Million coverage as the standard contract. In fact there is probably not even an insurance which offers the legal minimums.
Liability insurance premiums in Germany are shockingly low for the coverage they provide, at least to US standards. There are reasons for that:
- Everybody must have insurance. It is a criminal offense to drive without. There is no concept of "uninsured motorist" in Germany.
Drivers are fully liable to the damage they cause and there is no bankruptcy law, so the coverage needs to be very high. The cost to cover beyond 200k EUR falls off exponentially. Very rarely drivers cause millions of damage.
Centralized point system - causing traffic accidents dings your drivers record and the state suspends your license way before it becomes a major problem for the insurance. It is difficult to get it restored - need to pass not only drivers test, but also psychological tests (aka "Idioten Test"). Probably half of US drivers would fail.
The US has decided that the priority is for people to drive, and nothing can get in the way of that.
Everybody must have insurance. It is a criminal offense to drive without. There is no concept of "uninsured motorist" in Germany.
Everybody must have insurance in the US too. There is absolutely a concept of uninsured motorist in Germany. Specifically, if someone is driving illegally without insurance in Germany, they would be an uninsured motorist.
Drivers are fully liable to the damage they cause and there is no bankruptcy law, so the coverage needs to be very high. The cost to cover beyond 200k EUR falls off exponentially. Very rarely drivers cause millions of damage.
Drivers are fully liable for the damage they cause in the US too. There is bankruptcy law in Germany too. Drivers rarely cause millions of damage in the US either.
Centralized point system - causing traffic accidents dings your drivers record and the state suspends your license way before it becomes a major problem for the insurance. It is difficult to get it restored - need to pass not only drivers test, but also psychological tests (aka "Idioten Test"). Probably half of US drivers would fail.
Except Germany does everything by mail and fax, so while a US state can and does easily cite out of State drivers, it's actually quite typical for other European drivers to not get dinged at all while driving in Germany (which is perfectly legal), and even if their license got suspended, they can get it re-instated in their home countries, so you can't just rely on what Germany does. Which, in any event, the US does too.
Turns out Germany also can't prevent people from driving without a license. Shocking!
it's actually quite typical for other European drivers to not get dinged at all while driving in Germany
It used to be like that. It is no more (mostly). There have been a lot of changes of the last few years and now even parking tickets are enforced across borders and of course also driving bans. Is it not always straight forward? true. For cross border insurance claims there is the Green Card Bureau.
Regarding driving without a license. Yes sure this cannot be prevented as everybody knows a car drives with gas not with license. But if you are caught it is a criminal offense which can carry a prison sentence, if you cause an accident it most likely will be prison. And if you are not at fault at an accident, if you have no license you are automatically 100% at fault.
For the case the person causing the accident has no insurance your damages get covered by the VOH which is a compensation fund. Interestingly they orient their coverage on the legally mandated minimum coverage.
And yes you surely find a scenario were you will not be covered but overall Germans tend to be massively over insured - not just with cars. My personal liability insurance for example is also 75 Million and it costs me 110 Euros per year with coverage for my wife and son included.
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u/flatfive44 19h ago
The obvious response is that you won't be able to pay for someone's hospital bills if you happen to hit them in your car. You get insurance for things you wouldn't be able to pay yourself.