Telematics insurance offers savings amid rising German car insurance costs

Car insurance costs in Germany are rising significantly due to exploding workshop and spare parts prices. According to the GDV, the average cost for property damage in motor vehicle liability reached 4,250 euros in 2024, a nearly 60 percent increase since 2017. This surge is driven by a 50 percent rise in labor rates for body and paintwork and a 6 percent increase in spare part costs. Consequently, insurers reported industry-wide losses of nearly 5 billion euros over the last two years.

To mitigate these costs, many providers are offering telematics insurance, often called ‘pay how you drive’ tariffs. These systems use GPS, apps, or telematics boxes to monitor driving behavior, including speed, acceleration, and braking. Drivers who demonstrate safe habits can secure lower premiums based on an individual safety score.

Telematics technology has shown measurable success in the logistics sector. DHL Express reportedly reduced serious traffic incidents by 65 percent and accident-related costs by 49 percent through telematics solutions. Similarly, Gebrüder Bermes Spedition saw a 90 percent reduction in risky driving maneuvers after implementing such systems.