The German Insurance Association (GDV) has published its updated regional classification for car insurance, a metric which is used to calculate many people’s premiums. For millions of drivers in Germany, the change could mean higher costs for insurance. 

Car insurance could cost more for millions of drivers next year

Around 9,4 million drivers in Germany should expect their insurance premiums to change in the coming year, due to the adjustments to the regional classes. While around half of this group will likely see their premiums go up, the other half might actually pay less. For around 33 million drivers, nothing will change. 

The regional classification system is used as a risk factor to calculate car insurance premiums. In a nutshell, it describes the likelihood of a vehicle being damaged or involved in an accident in a certain region. The lower the class, the more “risky” a region is considered - which therefore makes it more expensive to insure a car registered there. The decisive factor is not where the damage or accident occurred, but where the car involved is registered. 

Insurers use the regional classification system as one of multiple factors when calculating insurance premiums, but they are not obliged to do so. Many insurance companies indeed have their own classifications that they use instead. 

Berlin and Offenbach have most expensive car insurance premiums

The new system has classes deteriorating in 49 districts - where around 4,7 million cars are registered - while classes have improved in 59 districts, which also cover around 4,7 million drivers. 

The “least risky” district in Germany, according to the classification, is the Elbe-Elster district in Brandenburg. According to the GDV, there are 30 percent fewer incidents of damage and accidents here than the average. 24 districts in Bavaria have also improved their classes, meaning around one in four drivers in the southern federal state can look forward to cheaper insurance. 

The riskiest district was named as Offenbach, closely followed by Berlin, where the GDV says damage and accident frequencies are almost 40 percent above the average. Berlin is ranked the worst of all German cities with more than 300.000 inhabitants. 

Insurance companies can use the new regional classifications immediately for new insurance contracts, and from next year when calculating renewal premiums. The change could make a significant difference for drivers in the most affected districts. According to the price comparison site Verivox, a 45-year-old person driving a VW Passat would pay almost twice as much in Berlin-Mitte as in Emden in East Frisia.