Insurance

Car insurance – it pays to compare

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Car insurance – every motorist needs it, but it can be a complicated business. Source: iStock / yattaa

Car insurance – every motorist needs it, but it can be a complicated business. If you're on the verge of buying a car, read on – we’ve researched the most important information on the subject and compiled a handy list of tips, enabling you to navigate the car insurance market with confidence.

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By law, every car registered in Switzerland must be covered by third-party liability insurance at the very minimum. If you want to take out extra insurance, you can choose between partial casco and full casco. Either way, there are a few decisions to be made. What sort of cover do I need? What exactly needs to be insured? Where can I save money? We will provide you with the information, tips and inside know-how you need to make the right insurance decisions. 

The process starts when you buy a car or decide to cancel a current policy. If you want to switch your car insurance to a different provider to benefit from better terms, you need to cancel your existing policy first. The first thing to remember is that most insurers require three months’ notice to cancel. Depending on the provider, you either cancel to 31st December or to the date the policy was taken out. However, if you buy a new car, you can switch insurance provider at any time.

Once you have finally bought your car or cancelled your old policy, it's advisable to read up on the subject of car insurance. We have put together a guide to some of the terms you may encounter to help de-mystify the subject.

Basic cover

Customers can choose between three types of basic cover: third-party liability, partial casco or full casco. The choice of cover usually depends on the age and value of the vehicle. As a rule of thumb, the newer the car, the more comprehensive the cover should be.

Third-party liability

Third-party liability insurance is compulsory and covers damage to third parties by the driver of the vehicle. This cover is also usually included as standard in partial and full casco insurance models. If your car is more than seven years old, you don't usually need any more cover than third-party liability.

Partial casco (+ third-party liability)

In addition to third-party liability, partial casco insurance covers damage to your own vehicle caused by theft, water, fire, martens or collision with an animal. This cover should be considered if your vehicle is between four and seven years old.

Full casco (third-party liability + partial casco + collision casco)

In addition to third-party liability and partial casco, full casco, also referred to as collision casco, covers damage to the vehicle caused by a collision or damage that is not covered by another motorist's liability insurance. So if you drive into a tree, the insurance company will pay for the damage to your vehicle. If your vehicle is less than five years old, you are advised to take out full casco insurance. It is compulsory for leased vehicles.

Occupants insurance

Occupants insurance covers treatment costs, a daily allowance for hospital stays or inability to work and pays lump-sum death and disability benefits. It can be taken out separately for drivers, front-seat passengers or all occupants of the vehicle. This type of insurance is unnecessary for vehicle occupants who have accident cover through their health insurance or employer – in other words, for anyone living in Switzerland.

Deductibles

The deductible for vehicle liability insurance is usually defined in the policy conditions. The deductible for young drivers (under 25 years of age) is normally 1,000 francs. If you are over 25 years of age and have had your driving licence for less than two years, you will usually have to pay 500 francs yourself in the event of a claim. All other drivers should not have to pay a deductible.

With partial and full casco insurance, you can choose the deductible yourself.

Bonus protection

When you take out car insurance, you are normally granted a substantial premium reduction from day one – provided you are an experienced driver. In such cases, the discount can amount to as much as 70 per cent of the calculated premium. The discount is granted according to a bonus scale that runs from 1 to 14, with the lowest level representing the largest discount. You can find this information in your quote. If the person insured remains accident-free, the “bonus” is gradually reduced to its lowest level, which is equal to the highest discount.  However, if you make a claim, the discount is reduced – or may be lost completely following a series of claims – and your once affordable car insurance starts to get pretty expensive. You can insure yourself against these premium increases by taking out a bonus protection add-on.

Market value and replacement value supplement

All vehicles have a market value. This is the value that can be attributed to a vehicle at a particular point in time. It is determined by the service life, mileage, saleability and general condition of the vehicle. To compensate for the disproportionately high loss in value of a vehicle during the first few years of its life, you can take out a replacement value supplement. This ensures that if your car is written off, the insurer will pay out the market value plus around 20 per cent. 

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10 tips to help you stay on track

To steer you through the complex maze of car insurance, we have compiled the following tips:

1. Think about what cover you actually need
If your car is more than seven years old, third-party liability insurance is usually sufficient. If the vehicle is between four and seven years old, partial casco is recommended.  Consider full casco if you have a vehicle that is less than five years old.

2. Consider protecting your no-claims bonus
Taking out bonus protection insurance helps you retain a low bonus level even if you make a claim. It doesn’t cost a lot to protect your bonus and keep your premiums low.

3. Ensure that expensive accessories are included in the cover
If you take out casco insurance, don't forget to inform your insurance company of any expensive accessories/modifications on your car (laser headlights, custom paintwork, tuning, etc.). Otherwise, you run the risk of your cover being insufficient in the event of a claim.

4. Weigh up whether you really need cover for damage while parked

Damage to parked cars is already covered by full casco policies. However, if you do not have bonus protection, any claims can lead to an often quite hefty reduction in your bonus. You should also bear in mind the deductible. However, if you have taken out partial casco insurance, you can only expect the insurance company to pay out in very few cases. Since many insurers have a long list of exclusions and the cost of additional cover is high, this insurance is only worth considering for new cars.

5. Find out how a write-off is handled

Not all insurance companies deal with a write-off in the same way. To avoid unpleasant financial surprises in the event of a claim, find out about your insurance company's approach to paying out for a write-off.

6. Cancel your full or partial casco insurance at the right time

Full and partial casco cover usually only makes sense for new cars. You should therefore cancel your policy as soon as your vehicle reaches a certain age. This way you can avoid paying unnecessary premiums.

7. Compare premiums

Comparing insurance quotations rather than settling on the first provider to come up with a good price could save you as much as 700 francs in premiums in 2017.

8. Take advantage of discounts
If you really want to save money, consider the insurance implications before choosing which car to buy. The cheaper the car and the lower the power-to-weight ratio, the greater the savings on insurance premiums. Some insurance companies even grant “green” discounts for particularly eco-friendly vehicles.

9. Increase the deductible

With partial and full casco insurance, policyholders can choose their deductible themselves. If you opt for a high deductible, you can enjoy significant savings on your premiums. But a word of warning: If you live in an area often frequented by martens, for instance, or if you often let inexperienced drivers drive your car, you may be better off selecting a low deductible. Wondering if a higher deductible is really worth it? Think back over the claims you have made in the last five years – they are a good indication.

10. Don't be talked into taking out unnecessary cover
If you have a ten-year-old car, you definitely don't need a costly full casco insurance policy. You should also think carefully before taking out additional occupants insurance – it only makes sense to do so in very few cases.

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