German courts curb insurance payouts for rental cars and vehicle damage

The Federal Court of Justice (BGH) ruled that when a crash victim rents a replacement vehicle of a lower class, the insurer is only required to cover the cost of the actual rented class, not the class of the damaged car. The case involved a VW Multivan that was repaired while the claimant rented a cheaper VW Tiguan; the insurer’s partial payment was upheld.

In a separate decision, the Munich District Court dismissed a claim for reimbursement from a liability insurer after a visitor’s winter jacket scratched his brother’s Mercedes. The court held that the insurer is not obligated to repay amounts the insured has already paid to a third party when the claim is found unfounded.