Notional settlement:
payment instead of repair
After a no-fault accident in Germany, you do not necessarily have to repair your vehicle. German law can allow payment of the recoverable net repair amount shown in the report.
Request a report quotationReviewed by UnfallExperten Team GmbH, independent VFFS vehicle experts. Status: June 2026.
1. What is notional settlement?
German law gives the injured party a choice: repair the vehicle and submit the invoice, or settle notionally. Under notional settlement, the opposing liability insurer pays the recoverable repair costs calculated in an independent report without requiring proof of repair. This follows the injured party's freedom of disposition under section 249 BGB, subject to restrictions including leasing, financing, total loss and VAT.
You may arrange a cheaper repair, repair it yourself, continue driving with cosmetic damage or sell it unrepaired. The payment is based on the justified net repair amount, not the cost of what you later choose to do.
Swiss claimants
The option applies where German liability law governs the loss, particularly after a no-fault accident in Germany. If the vehicle would be repaired in Switzerland, the report must justify the relevant Swiss labour rates and costs in CHF.
2. Net or gross: VAT
Notional settlement is generally net. Under section 249(2), sentence 2 BGB, VAT is reimbursed only if and to the extent actually incurred.
- No repair: payment without VAT.
- Later repair with invoice: the VAT actually incurred may generally be claimed later, subject to correct separation of notional and concrete settlement.
- Partial or self-repair: VAT only on services and parts actually purchased.
3. Additional claims
- Diminished value: a justified market loss is separate and additional.
- Expert fees: with clear opposing liability and damage above the minor-damage range, necessary fees are generally recoverable.
- Expense allowance: German practice commonly allows about EUR 25–30 for calls, postage and administration.
- Solicitor's fees: with clear opposing liability, necessary traffic-law solicitor costs can form part of the recoverable loss.
Loss of use is not automatic
Loss-of-use compensation requires an actual accident-related loss of the vehicle plus intention and ability to use it. Continuing to drive without repairing usually produces no additional loss-of-use claim.
4. When can it be useful?
A different workshop or partial repair costs less than the justified calculation.
You accept the dent or scratch and continue using the vehicle.
You sell the vehicle unrepaired and retain the settlement.
The payment contributes to the replacement vehicle.
5. Limits and pitfalls
- Economic total loss: payment is limited to replacement value minus residual value.
- 130% rule: requires a complete professional repair and continued use; it is not available notionally.
- Insurer deductions: labour rates, parts-price supplements and transport costs are frequently disputed.
- Estimate instead of report: a workshop estimate does not establish diminished value, replacement value or loss-of-use duration.
6. The report determines the amount
Items omitted from the report are seldom paid voluntarily. A complete independent report with justified Swiss repair rates, parts prices, repair method and relevant additional positions is therefore the basis of the claim.
Notional settlement: FAQ
Can a Swiss claimant use notional settlement after an accident in Germany?
Yes, where the claim is governed by German liability law. The recoverable repair costs shown in the report can generally be paid without proof of repair.
Do I receive VAT?
Notional settlement is generally net. VAT is recoverable only to the extent that it is actually incurred.
Can diminished value be paid as well?
Yes, where commercial diminished value is justified. It is a separate claim and can be added to the recoverable net repair costs.
Can I claim loss of use without repairing?
Usually only where there is a proven actual period of non-use. Continuing to drive without repair generally does not create a loss-of-use claim.
What happens in a total-loss case?
Payment is limited to the replacement expenditure: replacement value minus residual value. The 130% rule requires an actual complete professional repair and is not available notionally.
Notional settlement starts with the report
Request a non-binding quotation for an independent report using the relevant Swiss repair conditions.
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