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As soon as a person buys a brand new car, they immediately lose their sound sleep and their usual confidence on the road. Only they can be heartbroken by the first chip on the bumper or terribly depressed by a fresh stain on the floor mat.
There are only two options – time or comprehensive insurance. Moreover, the latter is not only the most effective but also the fastest-acting.
After the disastrous 2015, demand for car insurance has been growing for the second year in a row. In 2016, the number of comprehensive insurance policies increased by 17%. And there's no doubt that the growth rate will be even higher by the end of 2017. In the first half of the year, CASCO premiums have already grown by 20%. So what's so interesting about one of the most expensive services, which can cost up to 10% of a car's price?
The main reason for the growing popularity of CASCO is rapidly growing new car sales. The auto market is recovering at an accelerated pace, despite the popularity of license plates in Ukraine. In 2016, approximately 64,500 cars were sold, which is 39% more than in 2015. This year, car dealers have exceeded even their own expectations. Instead of the projected 20% increase, the market jumped by 35% in the first half of 2017. A total of 36,500 new cars rolled off the showroom floor. Results could be even better in the second half of the year. By the end of the year, car sales are much better than at the beginning, primarily due to dealer promotions. New car sales by the end of 2017 are expected to reach approximately 50,000 vehicles, and the market will return to pre-crisis levels, when annual sales were around 85,000-90,000 four-wheelers.
Car dealership success suggests insurance companies will gain new customers. Some have already updated their offerings for newcomers, while also not forgetting about those owners whose cars have already been in service for a while. Beyond 10 years of operation.
One recent trend is for insurers to increasingly abandon standard CASCO terms, offering customers the option to choose only those options they find interesting. However, this isn't always the case with new cars. Owners of cars just off the showroom floor prefer to protect themselves from all possible losses. They're interested in the maximum possible protection, as well as the lenient attitude of insurers in the event of an insured event. CASCO insurance owners aren't prepared to wait months for compensation payments and are clearly unimpressed by the vast list of compensation limitations, many of which seem far-fetched.
The standard practice is for a payment decision to be made only after receiving a police report. This is issued when an accident is reported. But, firstly, calling the police isn't always practical, especially if there's no other party involved. For example, suppose a driver lost control and crashed into a tree. The police will likely confiscate their license and issue a fine. Secondly, the more paperwork, the longer it will take to receive payment. This is especially true if the insurance company decides to drag its feet. Eliminating this requirement from your insurance policy will save both time and money.
To reduce the cost of CASCO insurance and their own expenses, insurance companies include exclusions in their policies that prevent compensation. Essentially, they shift some of the risk from the insurer to the client. This approach is logical when it comes to serious traffic violations that result in an accident or damage to the vehicle. For example, driving under the influence of alcohol or drugs. But some companies go even further. Drivers who commit even minor violations often cannot expect compensation. These include speeding, even if it's just the 50 km/h limit. Driving at that speed in heavy city traffic is simply impossible.
Another "discriminatory" restriction that some insurers may deny payment for is driving on sidewalks or pedestrian paths. Almost all cities have a huge shortage of parking spaces. For this reason, cars drive and park wherever possible. It's not fair to say that such driving is justified, but it would also be unfair to blame only the car owners. Moreover, sometimes restrictions are imposed even where they shouldn't be. For example, when approaching schools and educational institutions.
Compensation may be denied if the car was damaged while making a U-turn in an unauthorized area or while driving into oncoming traffic. While these violations are obvious, they are sometimes necessary measures, especially given the condition of the roads. For example, to avoid an open manhole, a driver abruptly swerved to the left and veered into oncoming traffic, causing an accident. It seems they are at fault, but at the same time, they are not the only one at fault. Accordingly, the fewer exclusions for payments, the more favorable the insurance policy.
Most often, minor damage occurs. However, the likelihood of being involved in a major accident is extremely low, especially if the car is not used as a taxi and the driver has been driving for several years. Therefore, it is better to choose a policy with a zero deductible, including for windshield damage. Such policies are more expensive, but they protect the interests of the car owner much better.
To be fair, it should be noted that not all insurers will compensate for a chipped windshield without a certificate from the competent authorities. Some limit the number of payouts for such incidents to a maximum of two times during the insurance policy period without a certificate from the competent authorities. Since every second driver encounters windshield cracks, it makes more sense to choose comprehensive insurance without any restrictions.
Another common tactic used by many insurance companies is a high deductible for theft or theft risks. It's no secret that the crime rate in the country is growing daily. Car theft is one of the most common crimes. And the newer the car, the higher the risk of ownership change, especially for expensive vehicles.
Insurance companies are well aware that the likelihood of payouts in such incidents is extremely high. Therefore, many set the deductible at 5%. It's in the owners' interests to reduce it to zero, even if this significantly increases the cost of the policy. For example, at one of the leading insurance companies in the CASCO market, the insurance rate with zero deductibles for all risks is 6% of the car's value. Meanwhile, with 5% deductibles, the policy would cost 4%.
In any case, when purchasing a truly high-quality insurance policy, you can hardly expect any significant discounts or special offers. These can only be achieved at the expense of the client, not the insurance company.
Source:Personal account
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