Compensation Fund

The Association Verkehrsopferhilfe e. V. was founded in 1963 by all motor liability insurers which were members of the former Association of Third Party Liability, Accident, Motor and Legal Expenses Insurers: with effect from 1 January 1966 it was assigned the position of legal compensation fund for claims arising out of motor vehicle accidents and since 1 January 2003 the position of compensation body, with its consent in each case.

The Guarantee Fund has been established to close the last gaps in the Law on Compulsory Insurance and to save road accident victims from those hardships against which they are least able to protect themselves. According to Sects. 12 et seq. of the Law on Compulsory Insurance, it settles, inter alia, claims caused by the use of an illicitly uninsured motor vehicle, which cannot be identified, or caused intentionally and unlawfully by a motor vehicle. Furthermore, it is competent in the case of insolvency of a motor liability insurer operating in Germany. The entire claims expenditure is born solely by motor liability insurers: the public sector does not participate. Everybody may contact the Association; one does not have to be a member. From the earmarking of the Guarantee Fund it follows that it may not provide compensation for all losses indiscriminately.

In so-called “cases of hit-and-run driving”, to avoid any excessive or even abusive use of the fund, material damage caused to motor vehicles is compensated for only if considerable bodily injury has been caused at the same time.

In this context, the legislator rightly assumed that every vehicle owner for whom loss or severe damaging of his motor vehicle would result in hardship destroying his livelihood may protect himself by taking out full comprehensive cover. This is available for everybody at reasonable premium rates if an adequate deductible is agreed.

If the material damage may be compensated for, a cost-sharing contribution of 500 euro is deducted. Compensation for pain and suffering is paid in this case group if required to avoid gross inequity due to the particular severity of the injury. According to prevailing case law, such gross inequity is always deemed to exist if the injuries of the victim go clearly and drastically beyond injuries occurring in accidents in everyday road traffic. This means that the damage incurred has to stand out from the mass of bodily injuries by the fact that it represents a permanent and considerable impairment of the physical functions of the person concerned.

These restrictions do not apply in the other two case groups of “uninsured vehicle” and “intent”.

The Association does not settle the claims lodged by itself. Rather, it uses the services of a member company which carries on motor liability insurance as a direct insurer. If no agreement is reached with the victim on the grounds and/or the level or if legitimate claims exceed a certain limit, a Regulatory Committee set up with the Association settles the case.

This service is free of charge for the victim. Applications may be filed in a formless manner. A brief statement of facts and details on the losses claimed will suffice.