Change of car insurance policyholder: Your comprehensive guide for a smooth transition
18 Apr 2025
6
Minutes
Katrin Straub
CEO at nextsure
A change of policyholder for a vehicle can become necessary for many reasons, such as a sale, a gift, or a changed family situation. This process often raises questions: What should I consider? How does the change affect my premium and no-claims discount? Discover everything you need to know for a smooth transition here.
The topic in brief and concise terms
A change of policyholder for a motor vehicle requires the insurer's consent and notification to them; often, the premium changes due to a reassessment of risk.
The no-claims discount may be transferred under certain conditions, often within the family, with the recipient's driving experience limiting the maximum transferable level.
A special right of termination often exists in the event of a sale, change of owner, premium increase, or after a claim, with a notice period usually of one month.
Understanding the Basics of Policyholder Changes
A change of policyholder in car insurance means that the person who entered into the insurance contract and is responsible for paying the premiums changes. This is not the same as a change of ownership, although both often coincide, for example in the sale of a vehicle. The new policyholder takes on the rights and responsibilities of the existing contract or concludes a new one. It is important to report this change of insurance immediately, often within a week. The costs for a sole change of policyholder are usually low, but can amount to up to sixty euros if there is also a change of ownership and new registration. This step is crucial as it influences the calculation of the insurance premium, which depends on factors such as the age and driving experience of the new policyholder. Understanding these basics is the first step towards a successful transition.
Practical Implementation: Step-by-Step to the Change
The process of changing the car insurance policyholder involves several specific steps. First, you need to contact your current insurance company and request the change. The new policyholder must provide all relevant information, including personal details and driving licence information. In many cases, especially when there is no change of owner, a written consent from both the old and new policyholders is necessary. A practical example: if a child takes over the parents' car, they can be registered as the new policyholder even if the vehicle is still registered to the parents; this is known as divergent ownership. The insurance company will then adjust the contract and recalculate the premium. Please note that the exact requirements may vary depending on the insurer, so direct communication is always the best approach. Next, we will consider the effects on your no-claims discount.
No-claims discount: Managing transfers and consequences
A key point when changing vehicle insurance policyholders is the handling of the no-claims discount (NCD). The good news: The NCD can often be transferred to another person, typically within the family, such as a spouse, children, or grandchildren. For this, a discount transfer form usually needs to be submitted to the insurance company. It is important that the recipient can only take over as many claim-free years as they could have experienced themselves since obtaining their driving licence. So, a novice driver with one year of driving experience cannot fully take over the no-claims class 20 of an experienced driver. The transfer is often subject to conditions, such as the recipient having regularly used the vehicle or living in the same household. Please note that the person giving up their NCD irrevocably loses it. Therefore, a careful examination of the transfer options is essential before we turn to the legal framework.
Navigating legal frameworks and special cases
The legal basis for the transfer of rights and obligations when selling an insured item is found in Paragraph 95 of the Insurance Contract Act (VVG). This paragraph states that the purchaser assumes the rights and obligations of the insurance contract. There is a special right of termination in several situations, such as when there is a premium increase without an adjustment in benefits, after a settled claim, or upon the sale of a vehicle. The period for special termination generally extends to one month after becoming aware of the reason for the termination. A special case is the death of the policyholder: the insurance passes to the heirs. If the transfer of the vehicle to an heir occurred while the policyholder was still alive, this heir has a special right of termination. It is important to know the differences between the policyholder and the insured person, as the policyholder is the contractual partner with all rights and obligations. These legal aspects are crucial to handle the process correctly.
Here are some reasons that may trigger a special right of termination:
Premium increase by the insurer without a corresponding improvement in benefits.
After the claim settlement by the insurer.
Sale of the vehicle (either the buyer or the seller can cancel).
Change of vehicle owner, even without a sale (e.g., transfer within the family).
Decommissioning of the vehicle.
The exact conditions and deadlines should always be taken from the contract documents or directly inquired from the insurer to ensure that all steps are carried out correctly and no disadvantages arise.
Expert tips for an optimal change of insurance provider
To optimize the change of car insurance policyholder, there are some expert tips to consider. Our expert tip: Only cancel your old contract once the new contract is valid and you have received the insurance confirmation (eVB number). This prevents a gap in coverage, which in the worst case could lead to enforced decommissioning of the vehicle. Make sure to compare the services and rates of different providers before switching. Sometimes it is cheaper if the new policyholder stays with the existing provider, especially when it comes to transferring discounts. Document all steps in writing, especially cancellations and agreements regarding the transfer of discounts. An informal cancellation letter is often sufficient, but it should be sent by registered mail to have proof. If you are unsure, a consultation, as offered by nextsure, can help find the best solution for your individual situation and avoid mistakes. Remember that a sample letter for the change can be helpful. This careful preparation leads to a smooth transition.
Common mistakes and how to avoid them
Errors can easily occur during a change of car insurance policyholder that can cost time and money. A common mistake is confusing the policyholder with the vehicle owner; these are two distinct roles with different responsibilities. Another stumbling block is the assumption that the no-claims discount would automatically and entirely be transferable to any person; there are clear rules and limitations here, especially concerning the recipient's own driving experience. Many also overlook the cancellation periods, particularly the special right of termination, which often amounts to only one month. A critical mistake is using the vehicle without valid insurance confirmation, which can have serious consequences in the event of an accident. Avoid failing to inform the insurer about the change, as this can lead to problems with claims processing. Incomplete or incorrect information provided about the new policyholder can also lead to delays or incorrect premium classifications. By following these points, you ensure a smooth transition.
The impact of a change in policyholder on the premium
The change of the policyholder often has a direct impact on the amount of the car insurance premium. The premium is recalculated based on various factors concerning the new policyholder. These include age, driving experience (measured in years since obtaining a driving licence), place of residence (regional class), and the transferred or newly assessed no-claims class. For example, if a young driver with little experience takes over the insurance, the premium typically increases, even if the vehicle remains the same. Even a change in the youngest driver can influence the premium by more than ten per cent. The vehicle's type class also plays a role but does not change solely because of a change in the policyholder. It is therefore advisable to obtain several quotes before making the switch to assess the financial consequences. Understanding the term policyholder is fundamental here. This calculation is an important step before making a final decision.
The following factors significantly influence the new premium:
Age of the new policyholder.
Length of time the new policyholder has held a driving licence.
Transferred or newly assessed no-claims class.
Place of residence and associated regional class.
Annual mileage.
Occupation of the new policyholder (some rates offer discounts).
Type of vehicle use (private/commercial).
An exact calculation can only be made once all relevant data has been provided by the new policyholder.
Checklist for Changing the Policyholder
Conclusion and Next Steps
More useful links
Wikipedia bietet umfassende Informationen zur Autoversicherung in Deutschland.
The Federal Statistical Office (Destatis) offers tables and statistics on the vehicle inventory in Germany.
The Consumer Advice Centre provides information on how you can save on car insurance.
The ADAC offers guides on switching car insurance.
The Federal Ministry of Finance provides information on vehicle tax in Germany.
Kfz-Bayern offers downloads of contracts related to vehicles.
The Federal Motor Transport Authority (KBA) provides information on the Central Vehicle Register (ZFZR).
FAQ
What is the cost of changing an insurance policyholder in car insurance?
Simply changing the policyholder is often free or associated with minimal administrative costs. However, if there is a change of owner along with re-registration and new number plates, the charges at the registration office can amount to up to sixty euros.
Can I transfer the no-claims discount to my child?
Yes, transferring the no-claims discount to children is possible with most insurers. However, the child can only take over as many claim-free years as they could have accumulated since obtaining their driving license.
Does the vehicle owner also have to be the policyholder?
No, the vehicle owner and the policyholder do not have to be the same person. This is referred to as a differing ownership. This is common, for example, when parents insure their child's car.
Do I have a special right of termination when changing the policyholder?
A change of insurance policyholder does not automatically trigger a right to special termination if the owner remains the same. However, a right to special termination often exists in the case of a change of owner (e.g. sale), an increase in premiums, or after a claim.
What is the difference between a policyholder and a keeper?
The vehicle owner is the person to whom the vehicle is registered (recorded in the registration certificate). The policyholder is the person who has entered into the insurance contract with the company and pays the premiums.
How do I inform the insurance company about the change of the policyholder?
Contact your insurance company in writing or by phone. Often, a special form or a written consent from both parties (former and new policyholder) is required.
