What does the 1971 insured value mean in German machinery insurance?
In short
In German machinery insurance, the 1971 insured value (Versicherungswert 1971) is what your machine would have cost new at 1971 prices. What does that mean for you? Divide today's list price with freight and installation by the sum factor, 3.3390 for machinery in 2026: 250,000 euros becomes about 74,873 euros. If that value is right when the policy starts, the insurer does not cut later claims for underinsurance.
The factors that turn 1971 values into today's sums and premiums. Base 1971 equals 1.0.
Example
Typical range
Machinery under AMB and ABMG, as of 1 January 2026
sum factor 3.3390, premium factor 6.6246
Construction equipment only under ABMG, as of 1 January 2026
sum factor 3.7290, premium factor 6.7416
Electronics and machinery, year 2000
sum factor 2.4009, premium factor 3.7007
Electronics and machinery, year 2023
sum factor 3.0761, premium factor 5.6570
The factors are based on figures published by the German insurers association and are passed on by
insurers each year; individual insurers may round slightly differently.
The factor in your policy is what counts.
The premium rate itself is set by each insurer and is shown only in a quote.
Worked example
CNC machining centre, list price 250,000 euros
A metalworking firm insures a new machine in 2026 and compares the correct 1971 value with one that is too low. Later loss: 30,000 euros.
List price with freight and installation
250,000 euros
Divided by sum factor 3.3390
1971 sum insured about 74,873 euros
Correct value, loss 30,000 euros
paid in full, less the deductible
Wrong value of 50,000 euros at 1971 prices
only about 67 percent, around 20,030 euros
Assumed 1971 premium of 300 euros times 6.6246
1,987.38 euros premium in 2026
A wrong starting value costs about 10,000 euros on this claim, and on every later claim too.
Why German machinery is still insured at 1971 prices
Machine prices rise every year. So that companies do not have to update their sum insured by hand, many German machinery policies use a fixed unit: the price level of 1971. The policy shows the 1971 sum insured (Versicherungssumme 1971), and an index converts it to today's prices each year.
The basis is a model clause of the German insurers association on adjusting premiums and sums insured. It exists for stationary machinery (AMB) and for mobile equipment (ABMG), with the same structure.
How to calculate the 1971 insured value
Start with the new replacement value (Neuwert): today's list price of the machine in new condition plus packaging, freight, customs and installation. Discounts do not count. Divide this amount by the sum factor for the year in which you set the sum.
In 2026 the sum factor is 3.3390 for machinery and 3.7290 for construction equipment. Construction equipment has its own factor because it follows the producer price index for construction machinery.
If the machine is no longer listed, use the price of an equivalent new machine. Never use the price you paid for a used one.
New value today
Sum factor 2026
1971 sum insured
100,000 euro machine
3.3390
about 29,949 euros
250,000 euro machine
3.3390
about 74,873 euros
250,000 euro excavator
3.7290
about 67,042 euros
500,000 euro plant
3.3390
about 149,745 euros
Sum factor and premium factor are not the same number
The sum insured follows prices only, measured by the Federal Statistical Office's producer price index for capital goods. The premium follows prices by 30 percent and wages in the capital goods industry by 70 percent, because repairs are mostly labour.
That is why the premium in a 1971 value policy rises faster than the sum insured. In 2026 the premium factor of 6.6246 is about twice the sum factor of 3.3390.
Adjustment happens once a year using the last indices published before year end. Under the AMB 2008 version, only if the premium changes by more than 2 percent.
The underinsurance waiver and its one condition
Normally, under section 75 of the German Insurance Contract Act (VVG), an insurer cuts every claim proportionally if the sum insured is considerably below the insured value. The 1971 clause changes this: underinsurance only exists to the extent it would already have existed when the sum was agreed at March 1971 prices.
In practice: if you set the 1971 insured value correctly at the start, you are protected against cuts however much prices rise. If you set it too low, the index simply carries that mistake forward for the whole term.
New parts, conversions and extensions raise the new value. Report them, or a gap opens up there after all.
When a 1971 value policy is not a good fit
For very old machines that the insurer only pays at current market value after a total loss, the premium factor means you pay a rising premium for a sum that will not be paid out in full. Check whether a policy with a fixed sum is cheaper.
Under the AMB 2008 version you may cancel the clause if it raises your premium by more than 10 percent in one year or by more than 20 percent over three years. Newer versions leave these figures open; they are then set in your policy.
Step by step
Get today's list price of the machine in new condition from the maker or dealer.
Add freight, packaging, customs and installation; do not deduct discounts.
Divide by the sum factor for the year, as given by your insurer.
Enter the result as the 1971 sum insured for each machine.
Report conversions and new machines straight away with their own 1971 value.
Check sum factor and premium factor on every premium notice.
Checklist
New list price as the basis, not purchase price or book value
Delivery costs such as freight and installation included
Sum factor of the year the policy starts used
Construction equipment calculated with its own factor
Underinsurance waiver read in the clause
Right to cancel after steep premium increases known
Common mistakes
Entering today's new value as the 1971 sum and paying more than three times too much
Dividing the discounted purchase price by the factor and starting underinsured
Using the machinery factor for construction equipment
Not reporting conversions and losing the underinsurance waiver
Questions and answers
Frequently asked
Where do I find the sum factor?
Your insurer tells you each year, usually on the premium notice.
It is based on the Federal Statistical Office's producer price index for capital goods,
or for construction machinery.
Why does my premium rise faster than my sum insured?
Because 70 percent of the premium factor follows wages,
and wages have risen more than machine prices since 1971.
In 2026 it is 6.6246, against a sum factor of 3.3390.
What if I set the 1971 insured value too high?
You pay too much premium, but the insurer still pays no more than the actual loss.
You can ask for the sum to be reduced for the future.
Does the 1971 value apply to used machines too?
Yes.
For a used machine the list price of an equivalent new machine counts, not the used price.
Do I have to insure machines at 1971 values?
No.
There are also policies with today's new values and their own indexation.
Make sure such a policy also waives the underinsurance deduction.
