Can I deduct car insurance from my taxes in Germany?
In short
Partly. In Germany you can enter third party car liability (Kfz-Haftpflicht) as other provident expenses, capped at EUR 1,900 for employees and EUR 2,800 for the self-employed. Health and care insurance usually fill that cap already. Partial and comprehensive cover are not deductible for private cars. Accident costs on your way to work, including your deductible, can be claimed on top as work expenses.
Legal limits and average premiums that matter for the tax question in Germany.
Example
Typical range
Cap on provident expenses, employees
EUR 1,900 a year
Cap on provident expenses, self-employed
EUR 2,800 a year
Commuting allowance from the first km
EUR 0.38 per km
Car liability only, average
about EUR 256 to 290 a year
Liability with comprehensive cover, average
about EUR 590 a year
Caps and allowance under sections 10 and 9 of the German Income Tax Act, as of October 2026.
The figures in the worked example are guide values from quoting practice.
This is not tax advice.
Worked example
Employee in public health insurance, rear end collision on the way to the office
You pay EUR 600 a year for liability and comprehensive cover and cause minor damage on your commute.
Car liability share as provident expense
EUR 280 entered, effect EUR 0, cap already full
Comprehensive share
not deductible
Comprehensive deductible paid by you
EUR 500 as work expense
Tax saving at a 30 percent marginal rate
about EUR 150, if your work expenses already exceed the flat allowance
The premium itself saves no tax, but the deductible after the accident on your commute does.
Car liability as a provident expense
German income tax law counts contributions to liability insurance as other provident expenses (sonstige Vorsorgeaufwendungen). This includes car liability. You enter the liability share of your premium in the Anlage Vorsorgeaufwand of your tax return, the share is shown on your premium invoice.
The catch: these expenses share a cap of EUR 1,900 for employees, civil servants and pensioners and EUR 2,800 for the self-employed who pay their own health insurance. Basic health and care insurance always counts in full and usually fills the cap. Then the car liability saves no tax.
Part of car insurance
Employees
Self-employed, business car
Car liability
provident expense, usually no effect
business expense
Partial or comprehensive cover
not deductible
business expense
Deductible after an accident on the commute
work expense (Werbungskosten)
business expense
Higher premium after losing no-claims years
not deductible
through the higher premium
Why hull cover does not count
Partial and comprehensive cover protect your own car, which is property. The law only lists insurance against liability, illness, accidents, disability and death as provident expenses. Hull cover is not on the list.
You also cannot claim it through your commute. The commuting allowance (Entfernungspauschale) of EUR 0.38 per km covers by law all costs of travelling to work, including insurance, fuel and repairs.
Accident costs on the way to work are extra
If you have an accident on your way to work, the tax authorities accept the accident costs as work expenses on top of the commuting allowance, even if it was your fault. This covers repairs, towing, assessor fees, a hire car, medical costs and the deductible of your hull cover.
You can only deduct what you paid yourself. Insurance payments are offset. The Federal Fiscal Court ruled differently in 2019, but the tax administration still applies the more generous rule. A higher premium after the accident is not an accident cost.
What is different if you come from abroad
In the UK and US car insurance is usually not deductible at all for private drivers, so the German form can be surprising. Many employees in Germany do not have to file a return, but filing voluntarily often pays off, for example for commuting costs.
If you were only taxed in Germany for part of the year or have income abroad, special rules may apply. A tax adviser (Steuerberater) or an income tax help association (Lohnsteuerhilfeverein) can help.
When you can skip the effort
If you are employed and in public health insurance, entering car liability almost never changes your tax. It does no harm, the official portal (ELSTER) or tax software shows the result straight away.
You save more on car insurance through a cheaper policy with the same cover than through tax. Comparing before the renewal date often brings more than any entry in the tax form.
Step by step
Find the liability share of your premium on the invoice.
Enter it in the Anlage Vorsorgeaufwand under other provident expenses.
After an accident on your commute, keep all bills and the insurer's settlement.
Enter the part you paid yourself as work expenses in the Anlage N.
Self-employed: book car costs as business expenses.
Checklist
Premium invoice with liability and hull shares shown separately
Bills from garage, towing service and assessor
Insurer's settlement showing your deductible
Proof that the accident happened on the way to work
Logbook or one percent rule for a business car
Common mistakes
Entering the whole premium including hull cover as provident expense
Claiming insurance again as work expense on top of the commuting allowance
Forgetting accident costs on the commute
Claiming costs that insurance already reimbursed
Questions and answers
Frequently asked
Can I deduct car insurance from my taxes at all?
Only the liability share, as a provident expense, and only within the cap.
For most employees it therefore has no effect on their taxes.
Where do I enter car liability?
In the Anlage Vorsorgeaufwand under other provident expenses, only the liability share.
Is it worth it?
For employees in public health insurance almost never,
because health and care insurance fill the cap.
Entering it does no harm.
Can I deduct comprehensive cover because I drive to work?
No.
The commuting allowance covers all running costs of the commute, including insurance.
Can I deduct my deductible after an accident?
Yes, as work expenses if the accident happened on your way to work or on a work trip.
