What is car insurance?
Car insurance covers the risks involved in participating in traffic. Damage to both motor vehicles and drivers and passengers can be insured. Additionally, you can also insure your car additionally, so that theft (or damage caused by it) is also covered.
Which coverage do you choose? Third-party liability (WA), limited casco or all risk?
It is mandatory to insure your car with at least third-party liability insurance. This insures you for damage caused by your car to others (personal injury) and to the motor vehicles of others. Unfortunately, with third-party liability insurance, damage to your own car is not covered. With limited casco coverage (also known as third-party liability +), you have more coverage than just third-party liability. Damage caused by theft, burglary, storm, and fire is then covered. Glass damage is also covered under the limited casco coverage. If you want even broader coverage, there is also the All Risk coverage (also known as comprehensive insurance). With this coverage, in addition to limited casco, coverage is provided for vandalism and damage caused by your own actions. The coverage you choose, in addition to the risk you want to take, is often also important based on the age of the car. As a rule of thumb, the following can be used:
- Cars that are 6 years or younger: All Risk
- Cars that are between 6 and 10 years old: Limited casco
- Cars that are older than 10 years: Third-party liability (WA)
If you have taken out a loan for your car, it is wise to choose All Risk coverage. Otherwise, you run the risk that your car will be stolen or totaled, and the damage will not be reimbursed. You will then lose your car, but you still have to pay off the loan.
No claim discount car insurance
People who have no damage to their car and do not cause any damage are rewarded by insurers with a discount on the premium. The amount of the discount depends on the number of claim-free years and is also called a no claim discount. The amount of discount you receive depends on the bonus-malus ladder that the insurer uses. If you have no damage, you climb up (bonus) and get more discount, and if you do have damage, you fall one or more steps down (malus). When you make a claim for damage, you also lose a number of accumulated claim-free years.
Depending on the amount of damage you have, it is wise to calculate with an insurance adviser whether it is wise to claim the damage on your insurance or pay for it yourself. In that case, you compare the amount of damage with the premium increase of your car insurance.
Second family car arrangement
There are insurers that offer a second family car arrangement. This means that you can insure a second car and use the claim-free years of the first car. You also receive a discount on the premium for the second car. However, there are often a number of conditions, such as that the second car may only be driven up to a maximum of 12,000 kilometers per year.
Additional coverages for car insurance
In addition to the main coverages of car insurance (Third-party liability, Limited Collision Damage and Comprehensive), you can also choose from various additional coverages. The options available for additional coverage vary by insurer, but some of the common ones are:
- Personal Accident Insurance for Passengers
This coverage provides a one-time payment to you and your passengers in case of disability or death resulting from an accident while driving the car.
- Passenger Liability Insurance
This covers you and your passengers against bodily injury and property damage resulting from an accident. The actual damages incurred are reimbursed after an accident.
- No-Claim Protector
This allows you to file one claim per year without your insurance premium increasing. However, your accumulated no-claim bonus may be reduced. If you switch insurers after filing a claim, you can expect a lower no-claim discount.
- Legal Expenses Insurance
This provides legal assistance in case you need to pursue a claim for bodily injury or property damage resulting from an accident caused by another party.
- Motor Legal Protection Insurance
This is a more extensive coverage than Legal Expenses Insurance. With Motor Legal Protection, you get legal assistance in multiple types of legal disputes related to your car. For example, in case of criminal prosecution following a traffic violation or when you have a dispute with a garage where your car is serviced.
How much does car insurance cost?
The amount of the insurance premium depends on various factors, including:
- Age and how long you have held your driving license.
- Type of car (catalog value, power, brand, etc.).
- Postal code area where you live (the 4 major cities have a higher risk of theft and more traffic, hence a higher risk of accidents).
- The number of no-claim bonus years you have accumulated.
- The coverage you choose. The more extensive the coverage, the higher the premium.
- The number of kilometers you drive per year (the more you drive, the higher the risk of an accident, hence the higher the premium).
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