If your insurer raises the premium, you may have a special right to terminate your car insurance regardless of the usual end-of-year deadline. The basis is section 40 of the Insurance Contract Act (VVG), in German. What matters is the one-month deadline and the reason for the increase. This guide explains both.
In short: If your insurer raises the premium under an adjustment clause without a matching change in your cover, section 40 VVG lets you terminate within one month of receiving the notice. The termination takes effect no earlier than the date the increase would apply. A mere downgrade of your no-claims class does not, as a rule, trigger section 40 VVG. Last updated: November 2026.
Key points
- The special termination right under section 40 VVG requires a premium increase without a corresponding change in cover.
- You have one month from receipt of the notice. What counts is when the termination reaches the insurer (section 130 BGB), not the postmark.
- The insurer must announce the increase and point out your right to terminate. The notice must reach you at least one month before the increase.
- If the premium rises because your no-claims class is downgraded, because you moved or because insurance tax rises, there is as a rule no tariff adjustment under section 40 VVG, so no special termination right exists.
- Separate termination rights apply after a claim and when you change vehicle.
When can you terminate after a premium increase?
Section 40(1) VVG sets out the core rule. If the insurer raises the premium under an adjustment clause and the scope of cover does not change accordingly, you may terminate the contract within one month of receiving the insurer’s notice. The termination takes effect no earlier than the date on which the increase would apply. Section 40(2) applies the same rule to the reverse case: if the insurer reduces cover under an adjustment clause without lowering the premium accordingly, you can terminate in the same way.
ADAC names mainly a higher type class or regional class as the reason for an increase (page dated 2 November 2026), and rising claims costs can also trigger a tariff adjustment. What the rating of your model means is covered in the guide on type classes 2027. The table below shows where the right exists according to the sources used here.
| Situation | Special termination right | Basis |
|---|---|---|
| Premium rises because of a new type class or changed regional class | Yes | Section 40 VVG, ADAC guide |
| Premium rises because of higher claims costs (tariff adjustment) | Yes | Section 40 VVG |
| Insurer reduces cover while the premium stays the same | Yes | Section 40(2) VVG |
| Premium rises because of a no-claims class downgrade | No | No tariff adjustment, section 40 VVG does not normally apply |
| Premium rises because you moved | No | No tariff adjustment by the insurer |
| Premium rises because of higher insurance tax | No | No tariff adjustment, ask the insurer if in doubt |
Which deadline applies, and when does the termination take effect?
The deadline is one month and starts when the insurer’s notice reaches you. If the notice arrives separately from the premium invoice, the wording of the law means the period already runs from receipt of that separate letter. This is a common trap, because many people only open the invoice later. Check your post and your email folders as soon as your insurer announces a change.
As for the effect, the termination takes effect no earlier than the date the increase becomes effective. The insurer must notify you of the increase at least one month before and point out your right to terminate. An example shows the sequence.
- Assumption: Your insurer tells you on 20 November that the premium rises on 1 January. The notice reaches you the same day.
- Your one-month period runs until 20 December. The termination must have reached the insurer by then.
- The termination takes effect on 1 January, the date of the increase. Until then the old premium applies.
- Your new contract should start on 1 January so that your vehicle is never without liability cover.
How do you terminate correctly?
ADAC recommends written termination, ideally by registered mail with return receipt, stating the reason. That makes sense because receipt is what counts. State the reason in the letter, that is, the premium increase on a specific date, and ask for confirmation. The form your contract requires is set out in the policy terms. A template with further deadlines is in the guide Terminating car insurance: template, deadlines and proof.
- Find the insurer’s notice and record the date it reached you.
- Check whether the increase really rests on an adjustment and not on a downgrade of your no-claims class.
- Take out the new contract and have an eVB number ready for registration if the keeper or registration district changes.
- Draft the termination with the reason and your policy number and send it within the one-month period.
- Keep the old insurer’s confirmation and check the start date of the new cover.
Is switching automatically worthwhile after an increase?
Not necessarily. The special termination right lets you end the contract early. Whether another contract suits you better depends on cover, excess and your rating. Insurers use different scales for no-claims classes, so your rating can differ after a switch. If you are a new driver or a student entering the market, check how earlier experience is credited. The guides on transferring a no-claims class and on proof for student discounts are relevant here.
Which other special termination rights exist?
Besides section 40 VVG there are two further occasions, which ADAC also names. An overview:
| Occasion | Deadline | Effect |
|---|---|---|
| Claim | One month from notice of the settlement decision | You choose whether the termination applies immediately or later, at the latest at contract end |
| Sale or deregistration of the old vehicle | Cover ends with handover to the buyer or with deregistration | According to ADAC, premiums paid in excess are refunded |
| Premium increase under section 40 VVG | One month from receipt of the notice | No earlier than the date the increase becomes effective |
Temporarily taking a vehicle off the road is not a termination. Many insurers then convert the contract into a premium-free dormant policy. Duration and conditions are set out in your contract; in the GDV model terms, section H.1 deals with taking a vehicle out of service. This matters for stays abroad, see putting car insurance on hold during a stay abroad.
Frequently asked questions
Can I terminate if my premium rises after a claim?
A no-claims class downgrade is as a rule not a tariff adjustment and therefore creates no special termination right under section 40 VVG. After a claim there is, however, a separate termination right that you can exercise within one month of notice of the settlement decision.
Must the insurer point out the right to terminate?
Yes. Under section 40 VVG the notice of the increase must point out the termination right and reach you at least one month before it takes effect. The duty is stated expressly in the text of the law.
Does the postmark or the receipt count?
Receipt by the insurer counts (section 130 BGB). Send the termination well before the deadline and use a method that proves receipt.
Does the 30 November deadline still apply?
That date concerns ordinary termination at the end of the contract term and remains independent of the special termination right. The deadlines for your contract are in your policy schedule and terms.
Can I terminate by email?
Letter, fax and email come into question as routes. Which form your contract permits is set out in the policy terms. If in doubt, registered mail or a query to the insurer helps.
What to do now
- Check the date of the notice and the reason for the increase.
- Note the end of your period, one month from receipt.
- Compare offers by cover, excess and rating first.
- Send the termination in a way that proves receipt and secure uninterrupted liability cover.
If you would like to talk through your insurance with someone, you can find personal advice via Academycon.
Related guides
- Insurance for students: the cover you really need (in German)
- Terminating car insurance: template, deadlines and proof
- Type classes 2027: what the rating means for your car insurance
- Transferring a no-claims class
- Putting car insurance on hold during a stay abroad
Sources: Section 40 VVG (termination upon premium increase), gesetze-im-internet.de, retrieved November 2026; Section 92 VVG (termination after an insured event), gesetze-im-internet.de, retrieved November 2026 (in German); Section 130 BGB (effectiveness of declarations to absent parties), gesetze-im-internet.de, retrieved November 2026 (in German); ADAC, special termination right in motor insurance, page dated 2 November 2026 (in German).
Last updated: November 2026. This guide is general information, not individual advice.
