Accident with someone else’s car: who pays if the car isn’t insured in my name?
12.06.25
5
Minutes
Katrin Straub
Managing Director at nextsure
An accident is always a stressful situation, especially if the car is not insured in your name. Find out here what consequences you may face and how to behave correctly to avoid financial and legal pitfalls.
The topic in brief and concise terms
Driving without any insurance cover is a criminal offence punishable by substantial fines or imprisonment; the driver and the vehicle keeper are liable.
If the car is insured but the driver is not listed, the insurer will usually cover the other party’s damage, but contractual penalties and recourse claims may still arise.
Always clarify the insurance cover before driving a vehicle that does not belong to you, and have yourself listed as a driver if you use it regularly.
Quick overview: The most important things to know in the event of an accident with a car not insured in your name
An accident with a car not insured in my name can quickly become complicated. The first decisive question is whether the vehicle is covered by insurance at all. A lack of cover has serious consequences for the driver and the owner. If insurance is in place, it usually also applies to an unregistered driver, but often with consequences for the policyholder. Clarifying who is at fault has a major influence on who ultimately pays for the damage. In Germany, motor vehicle insurance is mandatory, and breaching this requirement is a criminal offence.
Scenario one: an accident involving a vehicle that is not insured at all
Driving without any insurance cover is a criminal offence in Germany under Section six of the Compulsory Insurance Act. The consequences are severe and affect both the driver and the vehicle owner. Fines of up to one hundred and eighty daily rates or a prison sentence of up to one year may be imposed. A daily rate is generally equivalent to one-thirtieth of monthly net income; with three thousand euros net income, the fine can therefore amount to eighteen thousand euros. Particularly serious: in the event of an accident, the driver is personally and without limitation liable with all of their assets for all resulting personal injury, property damage and financial losses. If the person responsible cannot pay, Verkehrsopferhilfe may step in, but later recovers the money from the party causing the damage. In addition to the financial consequences, there are up to six points in Flensburg and possibly a driving licence revocation. These regulations underline the importance of valid motor insurance.
Scenario two: accident with a borrowed but insured vehicle – driver not listed
If you cause an accident with a vehicle that is insured, but you are not listed as the driver in the insurance policy, the situation is different from driving without any cover at all. The vehicle owner’s motor third-party liability insurance will normally first cover the other party’s damage. This is important protection for the accident victim. However, the policyholder must expect consequences. Insurers may impose a contractual penalty, which often amounts to a full annual premium. In addition, premium back payments for the period of undeclared use are common. In some cases, the insurer may even terminate the policy or increase the excess for comprehensive claims. It is also possible for the insurance company to assert recourse claims against the unlisted driver, in other words to reclaim part of the amount of damage. An exception often applies in emergencies, for example if you need to drive someone because of a medical emergency. The exact rules can always be found in the General Terms and Conditions of Insurance (AKB) for the respective policy. More information on the topic of unlisted driver can be found in our blog. Communication with the insurer is crucial here.
Practical cases and recommendations for action: Responding correctly in the event of a claim
Imagine borrowing a friend's car for a move and causing a small parking scrape. The damage to the other vehicle amounts to 1,500 euros. If the car is insured but you are not listed as a driver, your friend's insurer will settle the damage. Your friend may, however, face a contractual penalty of perhaps 500 euros and an additional premium payment. A clear prior agreement is therefore worth its weight in gold. Our expert tip: always clarify the insurance cover and who is registered as the driver before setting off. If you use another person’s vehicle more frequently, the policyholder should register you as an additional driver. This may slightly increase the premium, but it avoids heavy penalties in the event of a claim. Document every accident carefully: take photos, note witnesses’ details and complete a European accident report. Report the damage to the insurer without delay. Information on insurance cover for other drivers is often helpful. These steps help speed up the process.
Secure the accident scene (hazard lights, warning triangle).
If anyone is injured, provide first aid and call emergency services (112).
Exchange details with the other driver (name, address, insurer, registration number).
Complete a European accident report, if available.
Take photos of the accident scene and the damage.
Do not admit liability at the scene.
Report the damage to the vehicle owner and their insurer immediately.
If the insurance cover is unclear or you suspect driving without insurance, inform the police.
Accurate documentation is essential for later settlement.
Expert knowledge: Understanding legal principles and current rulings
The Compulsory Insurance Act (PflVG) forms the legal basis. Section 1 PflVG stipulates that every keeper of a motor vehicle must take out and maintain liability insurance. This serves to protect road traffic victims. Section 6 PflVG classifies driving without valid motor third-party liability insurance as a criminal offence. Courts often rule strictly here, especially where personal injury is involved. A ruling by the Higher Regional Court of Hamm (case no. 9 U 153/14), for example, confirmed the full liability of a driver who caused an accident without insurance cover. The minimum coverage amounts are set by law: EUR 17.5 million for personal injury, EUR 1.22 million for property damage and EUR 50,000 for pure financial losses. According to the Insurance Contract Act (VVG), breaches of the so-called duty of care, such as allowing an undeclared driver to use the vehicle, can lead to reductions in benefits or recourse claims. Our expert tip: as the policyholder, make sure you keep the list of authorised drivers up to date at all times. A distinction between the keeper and the policyholder can also be relevant. Understanding these sections helps you grasp the significance of decisions.
Risk minimisation: How to avoid problems when hiring a vehicle
To avoid problems in the event of an accident in a borrowed car that is not covered by my insurance, preparation is essential. Before every trip in a vehicle that belongs to someone else, clarify the insurance cover. The vehicle owner should be able to confirm that valid motor liability insurance is in place and whether you are insured as a driver. For regular use, being included in the owner’s policy as an authorised driver is the safest solution. This often costs only a small surcharge of perhaps five to ten per cent, depending on the age and driving experience of the additional driver. For occasional trips, some insurers offer temporary driver extension, sometimes even for just a few days. A written loan agreement that clarifies liability issues is also advisable, especially for longer loans or valuable vehicles. At the very least, it should include the duration of the loan and the details of both parties. Also check whether comprehensive insurance is in place to cover damage to the borrowed vehicle itself. Without this, you or the owner will be left to bear these costs if you cause the accident. A careful prior check protects against unpleasant surprises.
The following points should be clarified before borrowing a vehicle:
Is valid motor liability insurance in place?
Am I named in the insurance certificate as a driver or covered under the driver group?
What excess applies for liability and comprehensive claims?
Is fully comprehensive insurance available for damage to the borrowed vehicle?
Are there any exclusions in the insurance policy (e.g. driving under the influence of alcohol)?
Will any contractual penalties or premium increases in the event of a claim be borne by the borrower?
Should a written loan agreement be drawn up to record these points?
This checklist helps you take the most important insurance-related legal aspects into account.
The complexity of insurance topics, especially in the event of a claim, can be overwhelming. At nextsure, we understand that every situation is unique. Our mission is to offer you tailored and easy-to-understand insurance solutions. If you are unsure about your current insurance cover or have questions about the topic of “an accident involving a car not insured in your name”, we are on hand with our expertise. We analyse your individual situation and help you find the right cover, whether for your own vehicle or if you plan to use someone else’s car occasionally. Good protection gives you the peace of mind you need on the road. We offer comprehensive advice on niche insurance and individual protection solutions. Contact us for a free review of your insurance situation.
More useful links
Gesetze im Internet offers the full text of the German Compulsory Insurance Act (PflVG), which forms the legal basis for motor vehicle liability insurance.
Verwaltung.Bund.de provides official information from the German federal administration on rights and obligations relating to the vehicle owner.
Kraftfahrt-Bundesamt (KBA) provides up-to-date statistics on vehicles in Germany, offering insights into the vehicle stock and registrations.
Statistisches Bundesamt (Destatis) offers comprehensive statistics on road traffic accidents in Germany, including causes and consequences.
Statistikportal.de presents the interactive accident atlas, which visualises detailed georeferenced data on road traffic accidents in Germany.
FAQ
My car isn’t insured in my name and I’ve had an accident – what are the first steps?
Secure the accident scene, administer first aid if necessary, and call the police, especially in the event of personal injury or if liability is unclear. Inform the vehicle owner and their insurer immediately. Document the accident carefully (photos, witnesses, accident report).
Does my private liability insurance cover damage if I cause an accident while driving someone else’s car?
No, not usually. Damage caused by the use of motor vehicles is generally excluded from private liability insurance. Vehicle third-party liability insurance is responsible for this.
What does “recourse” mean in connection with a driver who is not listed?
Recourse means that, after settling the claim, the motor insurance can recover part of the costs from the unlisted driver. The amount is often limited in the policy terms, but can amount to several thousand euros.
Can I drive a car if I’m not listed on the insurance certificate?
Driving is possible, but not recommended if you are not included in the list of authorised drivers. In the event of a claim, the insurer will usually cover the third party's damage, but it can become expensive for the policyholder (contractual penalty, premium increase, cancellation) and possibly for you as well (recourse).
How can I protect myself as the driver of someone else's car?
Speak to the vehicle owner before the journey. Ideally, you will be added to the policy as a driver, or a temporary driver extension will be arranged. A written loan agreement can also help clarify liability issues.
What is Verkehrsopferhilfe and when does it provide compensation?
Verkehrsopferhilfe e.V. is an organisation of German motor insurers. It steps in when, for example, the person responsible for the accident cannot be identified, commits a hit-and-run, or has no insurance and cannot pay for the damage themselves.
