Car insurance for other drivers: Minimize risks, maximize protection
25 May 2025
3
Minutes
Katrin Straub
CEO at nextsure
Your car, another driver – an unpredictable risk or an insurable situation? Many vehicle owners underestimate the consequences when an unreported person is behind the wheel and causes an accident. This article highlights how you can best protect yourself and others.
The topic in brief and concise terms
The expansion of the circle of drivers can significantly influence the insurance premium; novice drivers often increase the costs by over 50 percent, while partners can reduce them.
If an unregistered driver is involved in an accident, contractual penalties (often an annual premium), premium surcharges, and reductions in comprehensive cover benefits may be imposed.
For occasional trips, many insurers offer temporary extensions; emergencies are often excluded, but the exact conditions need to be clarified.
Understanding the Basics: The Driver Circle in Your Car Insurance
The so-called driver circle defines which individuals are authorised to drive your insured vehicle. Insurers use this information for risk assessment, as statistically, the risk of accidents varies with the number and type of drivers. Extending the driver circle, for instance, to include a novice driver, can increase the premium by up to 54 per cent. Providing the correct information about the driver circle is a contractual obligation. Unreported use by other drivers can have far-reaching consequences. Therefore, you should definitely be aware of the exact definition and the impact on your premium to avoid any unpleasant surprises.
Analyse financial risks associated with undeclared drivers
If a driver not registered in the policy causes an accident, the motor liability insurance generally covers the other party's damage. However, the insurer can impose penalties, often encompassing a full annual premium. Additionally, a premium surcharge may be demanded for the entire period during which the driver potentially used the car. For comprehensive damage, the excess may increase to up to €2,500, or the coverage may even be completely denied. These costs can quickly become a threat to one's livelihood. An accident with an uninsured driver should therefore be avoided at all costs. Awareness of these risks highlights the necessity of always keeping the list of drivers up to date.
Correctly adjust the driver circle and optimize costs
Adjusting the driver group is usually straightforward. Inform your insurer by phone, email, or through the customer portal. Generally, you will need the name, date of birth, and licence date of the additional driver. The costs vary significantly: Adding your partner may even reduce the premium by an average of four percent. However, a young driver under 24 can substantially increase the premium, as they statistically pose a higher accident risk. Here’s an exemplary procedure:
Contact your insurer before the new driver’s first journey.
Provide all required details of the new driver (usually date of birth, licence date).
Inquire about the exact impact on your insurance premium.
Confirm the change in writing, if necessary.
Check whether a special tariff for young drivers is cheaper.
Our expert tip: Ask about tariffs with partner discounts or check whether a short-term extension for occasional drives is sufficient. A proactive adjustment protects you from unexpected additional costs.
Check exceptions and special regulations for additional drivers
Not every use by another person must immediately lead to problems. Many insurers allow occasional, non-paid use by third parties without requiring explicit reporting. However, the definition of "occasional" varies; it is often limited to a few times per year or a period of up to three weeks. In emergencies, for instance, if you are unable to drive and a passenger drives you home, coverage is generally still provided. Some policies also provide exceptions when the policyholder is in the car, such as for trips to support (e.g., doctor visits). Always check the specific conditions for such exceptions with your insurer in advance. If there are ambiguities regarding the holder and policyholder, you should also consult with your insurance. This knowledge helps to avoid unintentionally compromising your coverage.
Keep an eye on legal foundations and recent rulings
The obligation to accurately specify the circle of drivers arises, among other things, from the Insurance Contract Act (VVG), particularly § 23 VVG concerning the increase of risk. [9,10] A deliberate misrepresentation can be considered a breach of duty. [1] Recent rulings repeatedly confirm that insurers are entitled to reduce benefits or demand contractual penalties in case of violations. [11,12] For example, the Higher Regional Court of Dresden ruled that a driver with comprehensive insurance is not automatically considered a co-insured person. [11] The following points are legally relevant:
Obligation to notify in case of increased risk (e.g., new, young driver).
Possible contractual penalties for false statements (often an annual contribution).
Risk of benefit reduction in the event of a comprehensive claim.
Additional premium demands.
Possibly termination of the insurance contract by the insurer.
Our expert tip: Document every change/notification to your insurer in writing. This protects you in the event of a dispute and helps to handle the details of a policyholder change correctly. A solid understanding of the legal framework is essential.
Cost trap for young drivers: Strategies for optimizing contributions
The inclusion of novice drivers in the group of drivers often leads to significant premium increases, sometimes by over 50 percent. This is due to the statistically higher accident risk of young drivers aged between 18 and 24. One way to reduce costs is accompanied driving from the age of 17; here, the surcharge can decrease to about 28 percent. Other driving experience, such as with a moped, can also have a positive effect. Compare offers carefully when a young driver is added. Sometimes, a separate insurance for novice drivers or using a parent's car as a second vehicle is a worthwhile alternative to consider. An annual review of the circle of drivers and the premiums is advisable.
Flexibly design insurance coverage: Short-term extensions and partner arrangements
For occasional journeys by third parties, many insurers offer a temporary extension of the driver circle, often for a few euros per day or even free for a limited period. [4,5] This can be a sensible option for holiday trips or when friends borrow the car for a weekend. [2] Including the spouse or partner in the insurance is often possible without additional cost or even with a premium discount of up to four percent. [1,1] Here are some options:
Temporary driver circle extension (e.g., for one to 21 days). [5]
Registration of the partner (often without extra cost).
Checking for special rates for family members.
Use of some insurers' apps for short-term registration. [3]
Our expert tip: Clarify in advance how often and for how long a free or low-cost temporary extension is possible per year. This allows you to optimally utilise insurance percentages and remain flexible. This ensures that other drivers are well insured too.
Your Individual Protection at nextsure
More useful links
Wikipedia provides a comprehensive overview of motor vehicle liability insurance.
The consumer advice centre explains that car insurance is mandatory for all vehicle owners.
Laws on the Internet contains the Compulsory Insurance Act (PflVG), which governs the legal framework for motor vehicle liability insurance.
FAQ
How often can another driver use my car without being reported?
Many insurers allow "occasional use" (e.g., a few times a year or for 1-3 weeks), but the exact definition varies significantly. Be sure to clarify this with your insurer. [2,5]
What penalties apply if an unregistered driver is driving?
Possible consequences include penalty fees (often an annual fee), retroactive payment of the higher premium, increased excess in the event of a claim, or even termination of the contract.
Is my child automatically insured as a novice driver?
No, novice drivers must be explicitly reported in the driver circle. This usually leads to a significant increase in premiums, often over 50 percent.
What does "restricted circle of drivers" mean?
A restricted group of drivers means that only certain named individuals or people with specific characteristics (e.g., minimum age) are allowed to drive the vehicle. This is usually cheaper than an open group of drivers. [2]
Can I expand the group of drivers at short notice, for example, for a holiday?
Yes, many insurers offer a temporary extension of the driver circle, often for a small fee or even free of charge for a limited period (e.g. up to 21 days). [2,5]
What if someone else has to drive in an emergency?
In genuine emergencies (e.g., the driver suddenly falls ill), insurance coverage is usually provided, even if the driver is not registered. However, this should remain the exception.
