130-Percent Rule

The 130-percent rule (130-Prozent-Regel) is a principle developed by German case law for cases in which the repair costs exceed the vehicle's replacement value (Wiederbeschaffungswert). Strictly speaking, this would constitute an economic total loss (wirtschaftlicher Totalschaden). However, because the injured party has a recognised integrity interest (Integritätsinteresse) in continuing to use their familiar vehicle, they may nevertheless have it repaired – as long as the repair costs (including any diminution in value) do not exceed 130% of the replacement value.

The rule thus builds a bridge between the principle of economic efficiency (Wirtschaftlichkeitsgebot) and the legitimate wish to keep one's own vehicle.

For the injured party to be able to claim reimbursement of the full repair costs within the 130-percent limit, several requirements must generally be met together:

• Complete and professional repair: The repair must correspond to the scope of the expert report; a partial or low-cost repair is usually not sufficient.
• Proof of the repair: for example by means of a workshop invoice or a repair confirmation (Reparaturbestätigung) issued by the assessor.
• Continued use: After the repair, the injured party must as a rule continue to use the vehicle for an extended period – under established case law usually at least six months.

If the projected repair costs exceed the 130-percent limit, settlement on the basis of repair costs is generally excluded; the claim remains a total-loss settlement.

Conceptually, the settlement of vehicle damage can be divided into tiers based on the ratio of repair costs to replacement value (RV):

• Repair costs below the RV minus the residual value (Restwert): unproblematic repair, which can also be settled on a notional basis (fiktive Abrechnung).
• Repair costs between the RV minus the residual value and 100% of the RV: repair generally possible; for notional settlement, continued use and the individual circumstances are decisive.
• Repair costs between 100% and 130% of the RV: reimbursement only in the case of a complete, professional repair and continued use – the core application of the 130-percent rule; notional settlement of the repair costs is generally ruled out here.
• Repair costs above 130% of the RV: as a rule only total-loss settlement (replacement value minus residual value).

A well-maintained vehicle that has been driven for many years suffers rear-end damage. The expert report states repair costs that exceed the replacement value by around a quarter – i.e. within the 130-percent limit. The owner has the vehicle fully and professionally repaired in accordance with the report, documents this with the workshop invoice and continues to use the vehicle afterwards. The insurer then generally reimburses the full repair costs, even though the vehicle was arithmetically a total loss.

For injured parties, the rule opens up the possibility of keeping a familiar and reliable vehicle instead of being settled on a total-loss basis. The complete repair and its proof are decisive.

For assessors, the precise determination of repair costs, replacement value and residual value is particularly delicate here: a few percentage points decide whether the 130-percent limit is met. The repair confirmation after the repair has been carried out is also a typical assessor service in these cases.