The choice of a motor insurance is sometimes complicated especially for a young driver. Tariffs, mandatory covers, options, deductibles, limits and reimbursement conditions, everything has to be taken into account. It must be recognized that it is difficult to make the right choice especially when one is inexperienced and with limited financial means.
Atlas Magazine, helps you pick your way through the legal rules and choose a car insurance without going over your budget.
Choosing a motor insurance: which cover for a young driver?
[4]It is important to known that according to statistics, young drivers cause more accidents than experienced ones. They pays more for their car insurance. Nevertheless, it is possible to reduce the amount of the bill by choosing only the strict legal minimum, that is to say to underwrite a motor third party liability (TPL) insurance policy.
1. Only Only motor TPL [5] is mandatory. It only covers material damage and bodily injury you cause to others (third parties). If the driver is at fault, damage to his vehicle is not covered..
In many countries like Algeria, Tunisia and Morocco, the tariff is imposed by the authorities. So it's the same for the whole market. It is in principle not negotiable, except when it comes to discounts on the commission of the general agent or the broker. However, when the tariff is free as it is the case in Europe, the negotiation is possible.
2. If the young policy holder is willing to spend more, he can underwrite optional motor covers that supplement the mandatory TPL guarantee. Depending on his budget and his needs, he can take out additional guarantees: theft or fire of the vehicle or glass breakage which can be underwritten on the basis of one cover at a time or two together or three together. They pertain to the non life class of business.
As such, these options may be subject to deductibles. The higher, the deductible, the lower, the premium. All the optional guarantees, that is to say, those underwritten in addition to the compulsory TPL cover, are freely rated by each insurer and are therefore negotiable. Here step in and use competition.
3. The driver can underwrite an additional cover to the TPL called "collision damage" which is in fact a complete third party capped at a certain amount. The "collision damage" guarantee covers, under certain conditions and limitations, the damage caused to the young driver's vehicle whether he is at fault or not.
Very often, the insurer offers several options of this type with different guarantee limits. Depending on his or her budget, the young driver can choose the motor insurance option that seems the most convenient.
4. Underwriting a comprehensive motor insurance. It is an all risks cover limited only to damage caused to the vehicle of the policy holder, faulty or not at fault. This guarantee comes in addition to the TPL cover and is the most costly option.
5. As an option, young drivers can underwrite a motor assistance insurance cover (breakdown assistance, reimbursement of hotel expenses in the event of a breakdown, etc.) and a bodily injury guarantee to cover the injuries caused to the driver at fault.
6. Alternatively, in some countries, insurers offer per kilometer options. The insurance premium is calculated based on the kilometers traveled by the vehicle. This option is suitable for vehicles occasionally put into circulation.
7. The most recent option related to new technologies is connected motor insurance service. This is the insurance of the future. The premium is calculated not only on the basis of the kilometers traveled but also on the quality of the driving. Several parameters are taken into account: speed, braking, compliance with the highway code, etc.
Choosing a motor insurance for young drivers: what mistakes should be avoided?
1. What you need to know. If the young driver chooses to underwrite a standard TPL policy, he is not required to declare the value of his vehicle. However, this declaration becomes mandatory when he underwrites a damage guarantee to the vehicle (comprehensive, theft, fire, etc.).
2. What you should not to do. Declare a false value of your vehicle. If this were the case, the insurer will apply a penalty upon the occurrence of a loss. This sanction may come in the form of a significant reduction of the indemnity.
If the insurer discovers and proves the intentional misrepresentation of the young driver before the occurrence of a claim, he is entitled to cancel the contract and keep the premium as damages. A cancellation of a contract means that the contract has never existed.
On the other hand, if the young driver intentionally declares a value higher than the true value of the vehicle, he is also liable to penalties. In the event of a claim, the insurer relies on the the motor assessor’s report [6] to define the true value of the damaged car, taking into account the list price, the age and condition of the vehicle, etc.
you should keep in mind that non-life insurance is based on the indemnity principle which prohibits any enrichment of the insured. In case of accident, the purpose of the insurer is to make the insured return to the same situation in which he was before the loss.
3. What you should do. Declare the true value of the vehicle. To lower the premium that he should pay, the young driver can increase the deductibles and above all, drive carefully and respect the highway code.