Putting car insurance on hold: save costs and optimise cover
03/05/25
6
Minutes
Katrin Straub
Managing Director at nextsure
Are you planning a longer stay abroad or only using your vehicle seasonally? Find out how you can suspend your car insurance and save money without giving up important cover. We explain step by step how it works.
The topic in brief and concise terms
Car insurance can be suspended contribution-free for up to 18 months when the vehicle is temporarily taken off the road, with motor third-party liability and partial comprehensive cover usually remaining in place.
The requirements are deregistration of the vehicle and a secure, private parking space; the no-claims class is often retained.
The dormant insurance starts automatically upon deregistration and ends upon re-registration or after the maximum period has expired, without the need for cancellation.
Quick Facts: The most important things about dormant insurance at a glance
If you are not using your vehicle temporarily, laid-up insurance is a smart option. It comes into effect automatically as soon as your insurer is notified of the deregistration by the registration authority. Here are the key points summarised for you:
No premium: As a rule, there are no additional costs for laid-up insurance if the contract has previously existed for at least one year.
Duration: The cover provided by laid-up insurance usually applies for a period of twelve to 18 months, and with some providers even up to 24 months.
Requirements: The vehicle must be deregistered with the licensing authority and must not take part in public road traffic. It must be parked in a private, enclosed parking space or in a garage.
Scope of cover: The insurance cover during the lay-up period usually includes motor third-party liability and, if previously included, also comprehensive cover.
No-claims bonus class: Your accumulated no-claims bonus class (SF class) usually remains intact if the interruption does not last too long.
These arrangements give you flexibility and security, even when your car is taking a break. In the following, we go into the individual aspects in more detail.
Practical section: When does lay-up insurance pay off and how does it work?
The decision to suspend a car insurance policy can make sense in various life situations. A classic example is a planned stay abroad lasting several months, during which the car remains safely in the home garage. Laid-up cover is also a common practice for seasonally used vehicles such as convertibles or motorcycles that are not ridden in winter. Another scenario is the sale of the vehicle, if a replacement is not purchased immediately, or an extended repair period following an accident. In all of these cases, you can save premiums for the motor third-party liability insurance and, where applicable, comprehensive cover through laid-up cover. The process is straightforward: when your vehicle is officially deregistered (taken out of service) at the registration office, your insurer is informed automatically and the policy moves into suspended status. In most cases, no separate application to the insurer is required to suspend the car insurance. The costs of deregistration itself amount to around ten to 30 euros, depending on the registration district. Please note that there is often a minimum period of two weeks between deregistration and re-registration. Laid-up cover ends automatically as soon as you re-register the vehicle or the maximum suspension period (usually 18 months) has expired. Cancellation of the laid-up cover is therefore not necessary. This automatic transition makes it easy for you to reduce costs without having to forgo basic protection.
Scope of cover during the rest period: What protection remains in place?
Even if you suspend your car insurance, you are not entirely without cover. The extent depends on your previous policy. As a rule, third-party liability cover remains in place, often with the statutory minimum coverage limits. This means that if your parked vehicle causes damage, for example through falling parts, this cover applies. If you had comprehensive or fully comprehensive insurance before the vehicle was taken off the road, partially comprehensive cover usually remains in force during the lay-up insurance period. This covers damage caused by theft, fire, explosion, storm, hail, lightning or flooding. Glass breakage or damage caused by marten bites may also remain covered depending on the tariff. It is important to note that fully comprehensive cover, which covers vandalism or self-inflicted accident damage, is usually not active during the suspension period. However, a few tariffs also offer full cover here. Please refer to your policy documents or ask your insurer directly for the exact conditions governing which cover applies to your vehicle during the lay-up insurance period. During this time, the vehicle must not be driven or parked on public roads. As a rule, only journeys to the registration office for registering or deregistering the vehicle, or for carrying out the main inspection, are permitted, provided they have been approved by the authorities. Compliance with these requirements is crucial for maintaining insurance cover.
Impact on your no-claims bonus class (SF class): What happens to your discount?
A common concern when suspending car insurance relates to the no-claims bonus class (SF class). The good news is that, in most cases, your SF class accrued over the years is retained if the suspension period is not too long. Many insurers store the SF class for a period of seven to ten years. For an interruption of less than six months, some insurers even count the time the policy was suspended positively towards the SF class. However, there is no standard rule, and the approach may vary depending on the insurer. Some providers downgrade the SF class if the insurance has been suspended for more than a year. It is therefore advisable to check with your insurer in advance exactly how long your SF class will remain in place under a lay-up insurance policy. For seasonal number plates, it is often the case that the SF class is only upgraded if the vehicle is registered for at least six months of the year. For shorter registration periods, for example only two or three months, the SF class usually does not improve. If you plan to take your vehicle off the road for more than 18 months and the lay-up insurance therefore ends, you will need a new car insurance policy when you re-register it, and the classification of the SF class must be renegotiated. Clarify these details so you are not surprised by higher premiums after the break.
Expert depth: Understanding legal foundations and important clauses
Laid-up insurance is regulated in the General Conditions for Motor Vehicle Insurance (AKB) of the respective insurers. A key requirement is the vehicle being taken off the road with the registration authority. The insurer is automatically informed of this. Under Section 27 of the Insurance Contract Act (VVG), an increase in risk, such as leaving the vehicle in an insecure location, can jeopardise insurance cover. The AKB therefore usually stipulate that, during the laid-up insurance period, the vehicle must be kept in a storage area (e.g. a garage) or on a fenced private property. A breach of this duty can result in the insurer being released from liability, as court decisions (e.g. OLG Cologne) confirm. Our expert tip: Document where you park your vehicle during the lay-up period, for example with photos. This can be helpful in the event of a claim. The duration of the premium-free laid-up insurance is usually limited to 18 months. If the vehicle is not re-registered within this period, the contract expires. The OLG Oldenburg has also confirmed that laid-up insurance can cover third-party liability risks, even if the vehicle has been deregistered, which can rule out criminal liability under the Compulsory Insurance Act, provided the cover remains in place. The OLG Celle also indicated that the possibility of laid-up insurance for an unregistered vehicle is generally recognised in the AKB. A look at your individual insurance conditions is essential.
Requirements and exclusions: When does dormant insurance not apply?
In order to successfully place your car insurance into suspension, certain conditions must be met. The most important is the official deregistration of the vehicle with the registration authority. In addition, the insurance contract must generally have been in place for at least one year before a premium-free suspension policy is granted. If the deregistration and the planned re-registration are less than two weeks apart, the suspension policy often does not take effect. Another important point is where the vehicle is kept: during the suspension period, the vehicle must be parked on private, enclosed property or in a garage and must not take part in public road traffic. There are also vehicles for which a suspension policy generally does not apply, or applies only with restrictions. These often include mopeds or caravan trailers. A regular suspension policy is also usually not предусмотрed for vehicles with short-term licence plates, as in such cases the contract term is limited from the outset to less than one year. Our expert tip: Be sure to clarify with your insurer before deregistering whether a suspension policy is possible for your specific vehicle and contract arrangement, and which conditions apply exactly. This will help you avoid unexpected gaps in cover or costs. Meeting these requirements secures the benefits of the suspension policy.
Suspending car insurance is primarily a cost-saving measure. During the suspension period, which can usually last up to 18 months, you do not pay regular insurance premiums for your motor insurance. This applies at least if your policy has previously been in force for at least one year. The suspension policy itself is then premium-free. Costs are incurred only for deregistering the vehicle with the registration authority, which usually amount to between €10 and €30. If your policy has not yet been in force for a year, or if you want cover beyond the standard suspension policy, a paid suspension policy can be taken out in exceptional cases. This can be relevant, for example, if you buy a vehicle but only want to register it several months later. The potential savings from the suspension policy can be considerable, especially with expensive insurance rates or longer periods off the road, such as twelve months. However, bear in mind that no vehicle tax is due during the suspension period either, which means additional financial relief. Weigh the savings against the limited scope of cover to make the decision that is right for you.
Alternatives and Additions: What to Do If Paid-Up Insurance Isn’t Right?
Putting a motor insurance policy on hold is not the best solution in every situation. If you are only taking your vehicle off the road for a few weeks, for example, the effort involved in deregistering and re-registering it may not be worth the saving, especially as a minimum suspension period of two weeks often applies. For vehicles that are only used in certain months, such as convertibles or motorhomes, a seasonal registration is often the better choice. Here, the dormant policy for the months outside the season is automatically included in the contract, and the vehicle does not have to be deregistered and re-registered every time. The registration period here is at least two and at most eleven months. If you sell your vehicle and buy a new one straight away, a dormant policy is not necessary, as the old contract ends when the vehicle is sold and a new contract is taken out for the new vehicle. If you want to permanently take your vehicle off the road and scrap it, you will need a certificate of destruction for the registration authority; the insurance also ends then. Our expert tip: For very short interruptions in use, or if you need full insurance cover, including comprehensive cover, throughout, putting the policy on hold may not be ideal. In such cases, it may make more sense to let the contract continue as normal or to look into special tariffs for low-mileage drivers. Personal advice will help you find the best option for your specific needs.
Your next step towards optimal protection
Suspending your car insurance offers an excellent way to save money when your vehicle is not being used temporarily. With the right knowledge of the requirements, duration and scope of cover, you can make the most of this option. Remember to check your insurer’s specific terms and choose the storage location carefully. At nextsure, we understand that every insurance situation is individual. We are happy to help you find the right solution for your needs, whether that is laid-up cover or another form of digital insurance protection.
Request an individual risk analysis now: Have your insurance situation reviewed free of charge and receive specific recommendations for optimisation.
More useful links
Wikipedia offers a comprehensive overview of car insurance.
On Wikipedia, you will find detailed information on the no-claims discount and how it works.
Finanztip offers practical advice on reactivating your no-claims discount class after a break.
The Kraftfahrt-Bundesamt (KBA) provides official statistics on the vehicle fleet in Germany.
Statista offers comprehensive statistics on the number of passenger cars in Germany.
The Umweltbundesamt provides data on transport infrastructure and the vehicle fleet in Germany.
FAQ
Do I need to actively cancel my car insurance to put it on hold?
No, you do not need to cancel your car insurance. The lay-up insurance automatically comes into effect as soon as your insurer has been informed by the vehicle licensing authority that your vehicle has been deregistered.
May I drive my car while the insurance is suspended?
No, while the insurance is suspended, the vehicle must not take part in public road traffic. Exceptions may include trips to the registration office or for the main inspection, if these have been approved.
Where must my car be parked while the insurance is suspended?
Your vehicle must be parked in a private, enclosed parking space or in a garage during the period of lay-up insurance. It may not be parked in public spaces.
What happens when the lay-up insurance expires?
The laid-up cover ends automatically after the agreed maximum period (e.g. 18 months) or when you re-register the vehicle beforehand. If you do not re-register it in time, the insurance cover lapses.
Does laid-up insurance affect my vehicle tax?
Yes, if your vehicle has been deregistered and the insurance is suspended, you do not have to pay vehicle tax for this period either.
Is laid-up insurance also relevant for seasonal licence plates?
Yes, for vehicles with seasonal registration plates, laid-up cover for the period outside the season is automatically included in the policy. The vehicle is then covered with partial comprehensive insurance at no additional premium outside the operating period, provided comprehensive insurance was in place beforehand.
