24 July 2012 - Car insurance, Travel
A family drives to the beach, parks the car, goes swimming – and the next thing they know, the car is gone. This is a horrible setback for the holiday and can have a drastic effect on the family budget. It is worthwhile to consider some actuarial particularities.
Car theft counts as total loss. It is covered by partial cover insurance, as long as the policy holder has taken this out in addition to the obligatory third party insurance. The compensation from the insurance provider is based on the value of the car at the time of the theft. As a rule, this so-called “current value” is nowhere near the sum that was paid for the car at the time of purchase. To minimise this difference, it is worthwhile, especially for new vehicles, to purchase a replacement value supplement. Thereby, it is recommended to take a look at the policy: this supplement is generally already included in comprehensive insurance up to the seventh year the vehicle is used. Therefore the victim of theft can use the compensation from the insurance provider to buy a comparable car. This means paying higher premiums, but the supplement is usually worth the cost in the case of total loss, including theft. In any case, the car owner receives at most the sum that they effectively paid for the vehicle.
Special conditions may apply to car theft when abroad. It is worth reading through the insurance documents before travelling. It is always essential to get official confirmation of the loss from the local police at the holiday location. Without a police report, the car insurance provider can refuse to compensate.
A supplement for roadside assistance or a breakdown service is also recommended. This service can help with information and tips and some insurance providers also cover the expenses or provide a replacement vehicle.