Auto insurance

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Self-insurance is the partial or complete waiver of a risk carrier on the risk transfer of his usual market insurable risks to insurance companies , because the risk carrier has the possibility of a risk compensation. The waiver of appropriate insurance is therefore based on technical risk considerations, whereby determinations of the probability of the occurrence of a risk equalization must be available.


In order to be able to organize a functioning self-insurance, a detailed risk analysis must first take place. This has to determine the cause of the damage, the frequency of the damage, the amount of the damage, spread factors (see accumulation ) and risk-compensating effects. The prerequisites for self-insurance are only met if, due to a correspondingly large number, an internal risk equalization can take place within a longer period of time. In the absence of such risk equalization technical possibilities and appropriate insurable risks still uninsured, is not to auto insurance, but not insurance .

Insurance companies are generally subject to insurance supervision , which in Germany is carried out by the Federal Financial Supervisory Authority (BaFin). Exceptionally, however, some forms of self-insurance are exempt from statutory insurance supervision. In addition to internal self-insurance, company support funds ( Section 3 (1) No. 1 VAG ) and certain municipal compensation payments (Section 3 (1) No. 4 VAG) are also not subject to supervision . Almost all other forms of self-insurance are subject to insurance supervision by BAFin.

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Risk takers who can take advantage of the option of self-insurance are companies and areas of the public sector , because their size allows them to bear some insurable risks themselves through risk-compensating factors. For example, Exporter risks a company importer positions compared to the same state in the same foreign currency are compensated. Also netting is a kind of auto insurance because this corresponding positions can be compensated. In the case of natural persons , the likelihood that risk-compensating factors exist is very low.

Internal auto insurance

Self-insurance can be organized in different ways. If it is carried out by the risk taker himself (e.g. in a special department of a company), it is an internal self-insurance . In economic terms, there is an insurance policy because the risk bearing is planned by combining many individual risks that can be compensated. Pension provisions are a typical example of internal self-insurance because the employer bases the financing of legally binding pension commitments and allocations to pension provisions on actuarial reports and creates the corresponding assets. However, internal self-insurance is not an insurance in the legal sense because it lacks a contractual basis; therefore it remains unsupervised. Companies can also take out self-insurance by offsetting imputed risks . The general entrepreneurial risk is not insurable .

External auto insurance

If a legally independent company ( self-insurance company ) is founded, there is external self-insurance . It is based on a reciprocal contract that includes all the features of an insurance contract . In this, the self-insurance company grants the contracting party a legal claim to an asset in the event of an uncertain event (“insured event ”) in return for payment of a fee , with the intention to offset the risk on the basis of the law of large numbers . This includes operational pension funds , operational support funds (if they are legally independent and grant legal rights), municipal damage compensations and Captive Insurance Companies of all kinds. The external auto insurance is usually legally insurance and therefore regulatory fee.

Self-insurance principle (self-coverage)

The auto insurance policy of the government arises from §§ 7 and 34 LHO ( budgetary principles of thrift and economy ), according to which a State generally not insured its risks to people, property and assets, but any accidental damage cover directly from its budget revenue. Public-sector risk provisioning is thus shaped by the principle of non- insurance. The public sector's own coverage is wrongly referred to as self-insurance if it covers the costs incurred from budget funds in the event of damage, without external insurance. Strictly speaking, these are mostly non-insurance because there are largely no risk-compensating effects. This also applies to the deductible (or deductible), because insurance is available for the majority of them and the insured person has to bear the deductible in the event of damage.

For the federal and state governments, it is often cheaper to bear the costs incurred in the event of damage from current household income, instead of burdening the household with high premium expenditure for insurance cover . The federal principle of self-insurance states that the default risk for federal property is borne by the federal government itself and that in principle no other federal risks are covered by insurance. Again, there is no insurance. It is assumed that the public authorities, due to their size and structure, can better bear the risks themselves than insuring themselves or transferring them to third parties through risk transfer in a paid way. As the old-age provision of civil servants shows, the efficiency of self-insurance systems rises continuously as the number of cases increases over a longer time horizon. This form of non-insurance is often referred to as self-insurance, but in most cases the term is incorrect. Self-insurance is the conscious renouncement of a risk bearer to an insurance contract risk protection, if there is sufficient internal risk compensation. Self-coverage exists when budget funds are used as a provision for risk provisioning . However, the federal structure makes the principle of self-insurance more difficult; the problem can be solved by a pool regulation, as is the case with the communal KSA compensation scheme .

Exceptions exist in the case of compulsory insurance by law ( compulsory insurance ) or by local statute or in the event of impending financial damage that could lead to excessive demands on the household (especially with fire insurance ). From the perspective of accounting law, the principle of self-insurance requires the creation of a provision for any damage claims so that households do not become overburdened in the event of larger claims.

The municipal compensation for damages is organized through unincorporated associations and works according to the apportionment principle for damages incurred. The member municipalities "insure" their risks from liability claims and other risks through bundling through the municipal compensation scheme, so that in the event of damage the total damage is jointly borne by all members and thus effective budget protection can be achieved. Municipal damage compensation is expressly exempt from insurance supervision by law. From an economic point of view, municipal compensation for damages is also a non-insurance because there are no risk-compensating effects.


A functioning self-insurance can achieve a more careful way of working and production in a company, because any damage is not covered by the insurer, but has to be borne at the expense of the profit. The moral hazard that normally exists in insurance companies is largely eliminated. Self-insurance reduces fixed costs because there are no corresponding insurance premiums; however, it can contribute to earnings volatility if losses occur that cannot be covered by appropriate risk offsetting. In the public sector, the self-insurance principle can lead local authorities to try to ward off damage even in cases where insurance companies would already pay due to their insurance conditions . This harms citizens or companies and directs them to take legal action .

Individual evidence

  1. Dieter Farny / Elmar Helten / Peter Koch / Reimer Schmidt (eds.), Handwortbuch der Versicherung , 1968, p. 781
  2. Verlag Dr. Th. Gabler, Gabler's Wirtschafts-Lexikon , Volume 6, 1984, Sp. 1972
  3. Fabian Schwartze, The municipal damage compensation , 2010, p. 391
  4. Dieter Farny / Elmar Helten / Peter Koch / Reimer Schmidt (eds.), Handwortbuch der Versicherung , 1988, pp. 781–784
  5. ^ Karl O. Bergmann / Hermann Schumacher, Handbuch der Kommunalhaftung , 2006, Rn. 2305
  6. Fabian Schwartze, The municipal damage compensation , 2011, S: 12
  7. Harald Pechlaner / Wolf von Holzschuher / Monika Bachinger (eds.), Entrepreneurship and Public Private Partnership , 2009, p. 36