How to Save on Insurance Costs in Germany: 8 Tips

Living in Germany means having the right insurance coverage, but the costs can add up quickly. Between health insurance, car insurance, liability coverage and more, it's easy to feel overwhelmed by premiums.

However, there are several strategies available to save on your insurance without sacrificing the coverage you need. In this article, we will share eight practical tips to help you reduce your insurance costs.

Understanding Your Insurance Options

Before optimising costs, it's crucial to understand the main insurance types in Germany: 

Knowing which types of insurance are mandatory and which are optional helps you prioritize what really matters and avoid paying for coverage you don't need.

8 Ways to Save on Insurance

1. Assess Your Actual Needs

The first step to saving money is understanding what coverage you truly need. 

• Avoid over-insurance: Don't pay for levels of coverage that are unnecessary and you'll never use.
• Consider your life stage: A single professional needs different coverage than a family with children.
• Review your optional policies: Some extras, like legal expense insurance, may not be necessary for everyone.

2. Bundle Your Policies

Many insurers offer discounts when you combine multiple policies. This not only saves you money, but it also makes your life simpler: one provider, one point of contact.

3. Increase Your Deductible

A deductible (Selbstbeteiligung) is the amount you pay before your insurance starts covering costs. Choosing a higher deductible can lower your premiums. This works well if:

• You rarely file claims.
• You have an emergency fund to cover unexpected costs.
• You're comfortable with moderate out-of-pocket expenses.

Example: Raising your car insurance deductible from €150 to €500 could save you €100+ annually.

4. Consider Usage-Based Insurance

If you drive infrequently, pay-per-kilometre (Telematik) car insurance can significantly reduce your costs:

• You pay a base rate plus a small fee per kilometre driven.
• This option is ideal for those driving less than 10,000 km/year.
• Some policies also reward safe driving behaviour.

5. Install Safety Features

Adding safety measures to your home or car can earn you significant discounts. Some examples include:

• For your home: Smoke detectors, burglar alarms, security cameras.

• For your car: Anti-theft devices, dash cameras, advanced driver-assistance systems (ADAS)

• Make sure to inform your insurer and provide documentation to claim the discount.

6. Use Family Insurance Where Possible

In public health insurance (GKV), non-working spouses and children can be covered at no additional cost through family insurance (Familienversicherung).

These are the eligibility requirements:

• Family members must earn less than €520/month (2026 mini-job threshold)
• They must live with you in Germany

This can save hundreds of euros monthly compared to separate policies.

7. Maintain Good Financial Standing

Your credit rating in Germany, known as your Schufa score, can influence how much you pay for insurance. It's basically a number that shows insurers how financially reliable you are. A low score can signal higher risk, which might lead to higher premiums.

To maintain or improve your score:

• Pay bills on time, since late payments can influence your score.
• Reduce outstanding debt, lower debt looks better to insurers.
• Check your Schufa report regularly. Errors happen, and correcting them can improve your rating.

8. Review and Adjust Annually

Insurance needs change over time, and what worked last year might not be the best fit today. It's a good idea to review your coverage whenever major life events happen, like getting married or divorced, having a child, moving to a new home, changing jobs, or buying or selling a car.

Ask yourself these questions annually when reviewing your policies:

• Are you using all the coverage you're paying for?
• Have your circumstances changed?
• Are there better prices available?
• Can you remove unnecessary add-ons?

What to Avoid

• Unnecessary add-ons. Extras like extended warranties or rental car coverage can end up costing more than they're worth.
• Minimum coverage when you need more. Saving a little money today can cause big problems later if you're under-insured when you really need it.
• Ignoring the fine print. Always check cancellation terms and notice periods so you don't get stuck with a policy that doesn't work for you.
  
  

Conclusion

Saving on insurance in Germany doesn't mean giving up on coverage, it means making informed choices. By understanding your needs, comparing options and reviewing your plans regularly, you can protect what matters without overpaying.

At Stay, we help international residents find the right coverage at the right price. If you'd like a review of your current policies, we're here to help.