Car insurance: what are the advantages of a direct insurer?

2. Which direct insurers operate in Switzerland?

• Postfinance: the public-sector financial services provider entered the car insurance market at the beginning of 2019.

• smile.direct: this company belongs to the insurance company Helvetia.

• Elvia: this online insurer is a subsidiary of Allianz Suisse.

• Simpego: this insurer has been on the car insurance market since 2017, initially trading as Dextra.

• AutoMate: this company joined the direct insurance market in 2020.

3. What are the advantages of direct car insurance compared to traditional car insurance?

Clearer choice

With their streamlined product range, direct insurers often offer a clearer-cut choice than classic insurers. They also offer easy-to-understand insurance documents. For example, Generali’s general insurance conditions amount to 24 pages, while Simpego’s are summarized in just nine.

Flexible notice periods

Conventional insurers usually stipulate a three-month cancellation notice period before you can terminate your policy. Many direct insurers have shortened this period to no more than one month. A few of them, such as Simpego, accept cancellations at just 24 hours’ notice if you are willing to pay a higher premium. Smile customers can cancel their insurance policy monthly. This makes it similar to having a subscription.

Individually selectable deductible

There are also differences in the choice of benefits. Some direct insurance companies (Simpego being one) allow you to determine your own deductible down to the franc. Many classic insurers only accept adjustments in increments of CHF 1,000.

Insurance modules can be taken out for longer

In addition, traditional car insurers restrict certain types of cover to vehicles below a certain age. This is true of cover for parked car damage, for example. Direct insurers often allow you to include this insurance module for vehicles that are over ten years old.

Good conditions in the event of a write-off

Direct insurers often offer excellent total loss compensation for generally low-cost insurance premiums. They tend to put a higher value on the car as a write-off than traditional insurers do.

4. What are the drawbacks of direct insurance compared to traditional car insurance?

Smaller product range

Direct insurers usually offer a less comprehensive range of insurance products than classic insurers. They tend to offer standard products that are in most cases limited to a particular segment. You will generally be better going to a traditional insurer if you want to get all of your insurance products from the same place.

Poorer accessibility than with classic insurances

With direct insurers, you do not benefit from a large network. With a direct insurer you do not have your own personal insurance advisor and do not receive any mail to your home. Instead, they communicate mainly by email, apps or text message.

Little-developed support networks

Zurich Insurance, for example, offers a total of 28 claims help points across Switzerland. After making a claim you can simply hand over the damaged vehicle at one of these points, and pick up your replacement car. AXA, meanwhile, sets up special hail damage repair centres after a major hailstorm. There you can have your claim assessed by an expert, agree on compensation, and make an appointment to have the repairs done. Younger insurance companies do not (yet) have these kinds of network.

Service limitations

New insurance companies are more likely than classic insurers to limit the benefits they pay out. Once again, parked car damage cover is a typical example: In many cases, direct insurers will limit you to a certain claim amount and a maximum number of parked car damage claims per year

5. What do I need to think about when choosing car insurance?

Whether you opt for a direct insurer or a classic insurance provider really depends on what you are looking for. If you value a comprehensive agency network and personal advice, then you’ll be well served by the classic option. If the main thing for you is flexibility, you might be better off choosing direct insurance.

Whatever type of insurance you go for, always pay attention to the details and restrictions of the different benefit modules. You’ll find these in the general insurance conditions or in the insurance quote.

When choosing car insurance, the devil is in the details – so it pays to compare.