Paying for car damage yourself: form, deadlines, and when it is worthwhile
26 Apr 2025
3
Minutes
Katrin Straub
CEO at nextsure
A minor car accident can happen quickly. However, before you report the damage to your insurance, you should check whether it is worthwhile to cover the costs yourself. Discover when self-payment is advisable and what formalities are involved.
The topic in brief and concise terms
Paying for car damage out of pocket can save money in the long run by avoiding an increase in the no-claims class, thereby preventing higher insurance premiums.
A buy-back of damages with the insurance is often possible up to six or twelve months after settlement and should be agreed upon in writing.
As a general rule, liability damages up to 1,500 euros and comprehensive damages up to 1,300 euros are often better paid for yourself, although an individual calculation by the insurer is advisable.
Understanding the Basics of Self-Regulating Damage
If your car insurance settles a claim, it negatively affects your no-claims discount. Your insurer assigns you a lower no-claims class, resulting in higher premiums. An exception is the partial comprehensive insurance, as it does not use no-claims classes. For liability and fully comprehensive claims, it may therefore be wise to handle the costs yourself. Many underestimate the long-term costs of being moved up a class. The decision to pay for a claim yourself should be well considered. This step can protect you from rising insurance premiums for several years.
When is it worth paying for car damage yourself?
Whether it is worthwhile to pay for damages out of pocket depends on several factors. A common rule of thumb is that liability damages up to around €1,500 and comprehensive insurance damages up to about €1,300 are often better settled privately. Your insurance company is obliged to provide you with a calculation upon request, which can serve as a guideline. Compare the one-time coverage of costs with the potential additional costs due to higher insurance premiums over the coming years. The insurers' downgrade tables provide information on the exact impacts. It is advisable to examine these tables, which are part of your contractual documents, closely. This way, you can better assess the financial burden.
Here are some situations where paying out of pocket is often advantageous:
For minor damages with repair costs under €1,000.
If you have a high no-claims bonus class and a significant downgrade is imminent.
If the predicted increase in premiums over the years significantly exceeds the damage amount.
If you are about to switch insurers and wish to present a clean claims history.
Accurate calculation is crucial for making an economically sensible decision.
The Process: Paying for Car Damage Yourself – Step by Step
When you decide to bear a damage yourself, a structured approach is essential. First, you should report the damage to your insurance, even if you are considering self-payment. This is often a contractual obligation. Then, clarify the possibility of damage repurchase with your insurance. This means the insurance initially settles the damage, and you reimburse the insurance costs later. The deadline for a damage repurchase is often six to twelve months after the settlement is completed. A special "Pay for your own car damage form" is not always standardized; it is often an informal written agreement or a note in the damage file. Ask your insurance about the exact procedure and any required damage report forms. Keep all agreements in writing. Communication with the accident opponent should also be clear and documented, especially if they want the damage to be reimbursed directly by you.
Form and Formalities: What to Consider?
A specific "pay your own vehicle damage form" is not legally required or uniformly designed. It is more about the correct handling with your insurance. Once the insurance has settled the claim and quantified the costs, they will inform you of the amount. You then have a period, usually six months, to reimburse this amount in order to avoid a downgrade. It is important to have written confirmation from the insurance about the damage repurchase. This confirmation serves as proof that the claim is considered settled by you and that your no-claims class is not affected. If settling directly with the other party without involving your insurance, it is advisable to obtain a waiver from the injured party, confirming that all claims are settled. Such an agreement for damage settlement should be detailed. Ensure that all relevant data such as registration number, date, and place of damage are included.
Expert Depth: Legal Aspects and Current Judgments
Legally speaking, the buy-back of damages is anchored in motor vehicle liability insurance. Insurers are obliged to offer you this option. The exact conditions, particularly the deadlines for the buy-back, can be found in the General Conditions for Car Insurance (AKB) of your contract. Our expert tip: Carefully check your AKB for the regulations regarding damage buy-back and the associated deadlines. For damages up to 500 euros, the insurer must even actively inform you about the possibility of a buy-back. Current rulings repeatedly affirm the rights of policyholders concerning transparent information about downgrading and damage buy-back. If there are any uncertainties, consulting an expert can be helpful. Also note that a self-damage cover may have different regulations.
Important paragraphs and regulations include:
§ 28 Insurance Contract Act (VVG) – Obligations of the policyholder.
The respective downgrading tables in the appendix of the AKB.
Regulations on discount protection, if agreed upon.
Deadlines for reporting damages (usually one to two weeks).
These points form the legal foundation for processing.
Impact on the no-claims discount category and contributions
Every liability or comprehensive insurance claim regulated by the insurer leads to a downgrade in the SF-class table. The extent of the downgrade varies depending on the insurer and the SF-class previously achieved. A downgrade means a lower no-claims discount and therefore a higher insurance premium. It can take several years to reach your original SF-class again. Even a single claim can increase premiums for five years or more. By paying for the damage yourself or purchasing damage recovery, your SF-class remains unaffected. This is particularly relevant if you plan to transfer your car insurance percentage or soon cancel your car insurance. A clean claims record is advantageous here.
Alternatives to Self-Payment: Discount Protection and More.
In addition to direct self-payment, there are other options to avoid or mitigate a downgrade. A common alternative is the so-called no-claims discount protection, which many insurers offer. With a no-claims discount protection, you usually have one claim per year without your no-claims bonus class being downgraded. This protection is usually associated with a small percentage premium increase. Check whether a no-claims discount protection is included in your policy or could be booked as an additional option. Another possibility is to switch car insurance after a downgrade. Other insurers may have more favourable downgrade tables or overall premiums. An insurance comparison can be worthwhile here. However, keep in mind that previous claims must be disclosed when applying. The decision for or against these alternatives depends on your individual situation and risk tolerance.
Conclusion and recommendations: Make smart decisions and save
More useful links
The Federal Statistical Office provides comprehensive data and analyses on traffic accidents in Germany.
The Federal Motor Transport Authority (KBA) offers detailed information on vehicle fleets and traffic incidents on its statistics portal.
The Consumer Advice Centre gives valuable tips on how to save on your car insurance.
Finanztip offers expert advice on when it makes sense to pay for vehicle damages out of your own pocket.
The Central Call of Car Insurers provides the European Accident Report in the form of a PDF document.
The German Bar Association explores the need for clear rules in damage assessment in an article.
FAQ
Do I need to inform my insurance even if I want to pay for the damage myself?
Yes, you should generally inform your insurance about a claim, even if you are considering paying for it yourself. This is often a contractual obligation. Then, explore the option of claim buyback.
What is the difference between paying for damages yourself and buying back damages?
Direct self-payment means settling the repair costs without involving the insurance. Through claims buyback, the insurance initially covers the damage, and you later reimburse the costs to them to avoid an increase in premiums.
Does self-payment affect all types of insurance?
No, opting for self-payment to avoid an upgrade is relevant for the motor liability and comprehensive insurance. The partial comprehensive insurance does not have a no-claims classification system, so a claim settlement here does not affect your premium through a downgrade.
What is a no-claims discount protection?
A discount protection is a paid additional option in car insurance. With it, you typically have one claim per year without your no-claims class being downgraded and your premium increasing.
Can I buy back a claim even if the insurance has already paid?
Yes, this is precisely the principle of the claims buyback. After your insurance has settled and paid for the claim, you can reimburse the cost to the insurance company within a certain period (usually 6-12 months).
Where can I find information about the downgrading of my no-claims class?
You can find information about the downgrade of your no-claims discount (SF-class) in the event of a claim in the General Terms and Conditions for Motor Insurance (AKB) of your insurance contract, often in the form of a downgrade table.
