Let your car insurance rest: Save costs and optimize protection
3 May 2025
3
Minutes
Katrin Straub
CEO at nextsure
Are you planning an extended stay abroad or only using your vehicle seasonally? Discover how you can suspend your car insurance and save money without losing essential coverage. We explain step-by-step how it works.
The topic in brief and concise terms
The car insurance can remain dormant free of charge for up to 18 months during temporary decommissioning of the vehicle, with motor liability and partial coverage usually remaining in place.
Requirements include deregistering the vehicle and having a secure, private parking space; the no-claims discount class is often retained.
The suspension of insurance automatically begins upon deregistration and ends upon re-registration or after the maximum duration, without the need for termination.
Quick Facts: The essentials of quiet insurance at a glance
If you temporarily do not use your vehicle, the pause insurance is a clever option. It automatically comes into effect as soon as your insurance company is informed of the deregistration by the vehicle registration office. Here are the key points summarized for you:
Free of charge: Generally, there are no additional costs for the pause insurance if the contract has been in place for at least one year previously.
Duration: The protection of the pause 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 registration authority and must not participate in public road traffic. It must be parked on a private enclosed space or in a garage.
Scope of protection: The insurance coverage during the pause phase generally includes motor vehicle liability and, if previously available, also the partial coverage insurance.
No-claims class: Your achieved no-claims class (SF class) is usually preserved if the break does not last too long.
These regulations offer you flexibility and security, even if your car takes a break. Below, we will examine each aspect in more detail.
Practical section: When is it worth having interruption insurance and how does it work?
The decision to suspend car insurance can be sensible in various life situations. A classic example is a planned, several-month stay abroad, during which the car remains safely in the home garage. For seasonally used vehicles like convertibles or motorcycles that are not driven in the winter, suspending insurance is common practice. Another scenario is the sale of the vehicle when a new one is not immediately purchased, or during a lengthy repair period after an accident. In all these cases, you can save on motor liability insurance and possibly comprehensive insurance contributions by suspending your policy. The process is straightforward: with the official de-registration (decommissioning) of your vehicle at the registration office, your insurer is automatically informed and the contract is suspended. Usually, no separate application to the insurer is necessary to suspend the car insurance. The cost of the de-registration itself ranges from around ten to 30 euros, depending on the registration district. Note that there often needs to be a minimum period of two weeks between de-registration and re-registration. The suspended insurance ends automatically once you re-register the vehicle or the maximum suspension period (typically 18 months) has expired. Therefore, cancelling the suspended insurance is not required. This automatic transition makes it easy for you to reduce costs without having to forgo basic coverage.
Scope of coverage during the resting phase: What protection remains in place?
Even if you put your car insurance on hold, you are not completely without protection. The extent of coverage depends on your previous policy. Generally, third party liability insurance coverage remains intact, often with the statutory minimum coverage amounts. This means that if your parked vehicle, for example, causes damage by parts falling off, this protection applies. If you had a comprehensive or partial coverage policy before laying up the car, partial coverage typically continues during the dormant period. This covers damage from theft, fire, explosion, storm, hail, lightning, or flooding. Glass breakage or damage from animals, such as marten bites, may also be covered depending on your tariff. It is important to note that comprehensive coverage, which includes vandalism or self-inflicted accident damages, is usually not active during the dormant phase. However, a few policies offer complete protection even during this period. For the exact terms of which coverage applies to your vehicle during the dormant period, please refer to your policy documents or enquire directly with your insurer. The vehicle must not be driven or parked in public traffic during this time. Generally, only trips to the registration office for registration or deregistration or to carry out the main inspection are allowed, provided they have been approved by the authorities. Adhering to these guidelines is crucial for maintaining insurance coverage.
Impact on the No-Claims Discount (NCD): What happens to your discount?
A common concern when pausing car insurance is the no-claims bonus class (SF class). The good news is: In most cases, your SF class, which you have accumulated over the years, remains intact if the pause does not last too long. Many insurers store the SF class for a period of seven to ten years. For interruptions of less than six months, some insurers even credit the pause period positively to the SF class. However, there are no uniform regulations, and the approach may vary depending on the insurer. Some providers downgrade the SF class if the insurance period exceeds one year. Therefore, it is advisable to inquire with your insurance company in advance about how long your SF class will be maintained during a pause in insurance. For seasonal number plates, it is often the case that an increase in the SF class only occurs if the vehicle is registered for at least six months a year. For shorter registration periods, such as only two or three months, the SF class generally does not improve. If you plan to take your vehicle off the road for more than 18 months, thus ending the pause in insurance, you will need a new car insurance policy upon re-registration, and the SF class rating will need to be renegotiated. Clarify these details to avoid being surprised by higher premiums after the break.
Expert Depth: Understanding Legal Foundations and Key Clauses
The storage insurance is governed by the General Conditions for Motor Vehicle Insurance (AKB) of each insurer. A key requirement is the deregistration of the vehicle with the registration authority. The insurance company is automatically informed of this. According to § 27 of the Insurance Contract Act (VVG), an increase in risk, such as parking the vehicle in an unsecured location, may jeopardise insurance coverage. Therefore, the AKB often stipulate that the vehicle must be parked during the storage period in an enclosed space (e.g. garage) or on a fenced private property. A breach of this obligation can result in the insurer being free from liability, as confirmed by court rulings (e.g. OLG Köln). Our expert tip: Document the location of your vehicle during the storage period, for example, with photos. This can be helpful in the event of a claim. The duration of the non-contributory storage insurance is usually limited to 18 months. If the vehicle is not re-registered within this period, the contract expires. The OLG Oldenburg also confirmed that storage insurance can cover liability risks even if the vehicle is deregistered, which can exclude criminal liability under the Compulsory Insurance Act, as long as the cover exists. The OLG Celle also suggested that the possibility of storage insurance for an unregistered vehicle is generally recognised in the AKB. It is essential to review your individual insurance terms and conditions.
Requirements and Exclusions: When does the suspension of insurance not apply?
In order to successfully suspend your car insurance, certain conditions must be met. The most important is the official deregistration of the vehicle at the registration office. Additionally, the insurance contract must usually have been in force for at least one year before a contribution-free suspended insurance is granted. If the deregistration and planned re-registration are less than two weeks apart, the suspended insurance often does not take effect. Another important aspect is the storage location: The vehicle must be kept on private, fenced property or in a garage during the suspension period and must not participate in public road traffic. There are also vehicles for which suspended insurance generally does not or only partially applies. These often include mopeds or caravan trailers. Also, for vehicles with short-term license plates, regular suspended insurance is usually not provided, as the contract duration is initially limited to less than a year. Our expert tip: Before deregistration, make sure to clarify with your insurer whether suspended insurance is possible for your specific vehicle and contract situation and what conditions exactly apply. This way, you avoid unexpected gaps in insurance coverage or costs. Adhering to these prerequisites ensures you the benefits of suspended insurance.
Costs and Savings: What Financial Aspects Should You Consider?
Putting your car insurance on hold is primarily a cost-saving measure. During the inactive period, which can generally last up to 18 months, you don't pay regular insurance premiums for your car insurance. This is at least true if your contract has been in place for at least a year. The inactivity insurance itself is then free of charge. Costs arise only for deregistering the vehicle with the registration office, which usually amounts to between ten and 30 Euros. If your contract has not yet been in place for a year or if you wish for protection beyond the standard inactive insurance, a chargeable inactive insurance can be taken out in exceptional cases. This can be relevant, for example, if you buy a vehicle but do not want to register it for a few months. The potential savings from inactivity insurance can be significant, especially with expensive insurance rates or longer periods of downtime, such as twelve months. However, consider that during the inactive period, there is no car tax to pay, providing additional financial relief. Weigh the savings against the reduced scope of cover to make the right decision for you.
Alternatives and additions: What to do if the rest insurance doesn't fit?
Your next step towards optimal protection
More useful links
Wikipedia offers a comprehensive overview of the topic of car insurance.
On Wikipedia, you can find detailed information about the no-claims bonus and how it works.
Finanztip provides practical advice on reactivating your no-claims discount after a break.
The Kraftfahrt-Bundesamt (KBA) provides official statistics on the vehicle fleet in Germany.
Statista offers comprehensive statistics on the car fleet 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 don't need to cancel your car insurance. The suspension insurance automatically comes into effect as soon as your insurer is informed by the registration authority about the deregistration of your vehicle.
May I drive my car while the insurance is dormant?
No, while the insurance is suspended, the vehicle is not permitted to participate in public road traffic. Exceptions may include trips to the registration office or for the main inspection, if these have been approved.
Where should my car be parked while the insurance is on hold?
Your vehicle must be parked in a private, fenced parking space or in a garage during the restful insurance period. It must not be parked in public spaces.
What happens after the deferred insurance period ends?
The rest insurance ends automatically after the agreed maximum duration (e.g., 18 months) or if you reregister the vehicle earlier. If you do not reregister it in time, the insurance coverage will expire.
Does the insurance affect my vehicle tax?
Yes, if your vehicle is deregistered and the insurance is suspended, you do not have to pay vehicle tax for this period either.
Is a rest insurance also relevant for seasonal license plates?
Yes, for vehicles with seasonal license plates, off-season insurance is automatically included in the contract for the period outside of the season. The vehicle is then covered by partial comprehensive insurance free of charge outside the operation period, provided that comprehensive insurance was previously in place.
