Notional Settlement & Free Choice of Repair Shop: The Porsche and VW Rulings Explained
After an accident that was not your fault, you don't have to have the car repaired: you can also have the repair costs calculated in the appraisal report paid out to you ("notional settlement"). The amount is regularly disputed – two leading BGH rulings set the framework.
The Principle
The basis is the independent appraisal report. What gets paid out are the net repair costs (excluding VAT, as long as no repair is carried out). Whether you have the car repaired, do the work yourself, or use the money for something else is entirely up to you.
The Porsche Ruling: Brand-Workshop Hourly Rates
As a rule, an injured party may base their settlement on the hourly labour rates of a brand-affiliated specialist workshop that the appraiser has determined on the regional market – not merely an abstract average of all workshops.
The VW Ruling: When May the Insurer Refer You Elsewhere?
The insurer may refer you to a cheaper independent workshop if its repair quality matches that of a brand workshop and the workshop is easily accessible to you – the insurer must set out and prove this equivalence. For vehicles up to three years old, such a referral is, as a rule, unreasonable; for older vehicles, service maintained exclusively at a brand workshop with a full service history can likewise rule out a referral.
Practical Tip
Never simply accept a reduction letter (the insurer's so-called "review report") without checking it – the reference workshops named there frequently fail to meet the BGH's requirements.
Key Court Decisions
- BGH, judgment of 29 April 2003 – VI ZR 398/02 ("Porsche ruling")
When settling on a notional basis, the injured party may base the claim on the usual hourly labour rates of a brand-affiliated specialist workshop in the regional market. - BGH, judgment of 20 October 2009 – VI ZR 53/09 ("VW ruling")
A referral to a cheaper independent workshop is only permissible where technical equivalence and reasonableness are proven; for vehicles up to three years old, this is, as a rule, unreasonable.
Had an accident? We will review your claims.
We review your claims and handle the entire settlement process with the insurer – after a no-fault accident, the other party's liability insurer as a rule bears the legal fees.
This article is for general information only and does not replace individual legal advice. As of: July 2026. All decisions cited are publicly accessible (including at bundesgerichtshof.de).