There are several factors that go into determining the amount of your car insurance premium. Find out how the insurance premium is calculated, and the possible remedies if there is a dispute with your provider.
What is an automobile insurance premium?
The price of your auto insurance is not the insurance premium. This is the amount you pay your insurer in exchange for the guarantees in your car insurance contract.
The insurance premium amount is usually calculated over a year in most cases. It can be reassessed every year. The premium payment is made by direct debit.
Insurance uses several criteria to calculate the premium based on the driver and type of car. The insurance premium will be higher if there are no guarantees in the contract.
The driver’s profile is the first criterion to calculate the insurance premium
The risk of driver accidents and therefore the driver’s profile is the first factor that determines the amount of the premium. In order to assess this risk, the insurance considers several elements.
- The driver’s age. The risk of being a young driver or an elderly driver is higher than for other drivers. The insurer will automatically invoice you for “overpressure” if you are a young driver. The premium is half off if there has not been an accident.
- The history of conduct. Your new insurer will usually ask for an information statement when you change your car insurance. This includes a history of accidents and the condition of your penalty.. This history is considered when calculating the premium.
- The driver’s occupation. Insurance companies also consider the risks associated with the driver’s job. Road drivers, for instance, are considered dangerous trades.
- The driver’s home. For example, metropolises are considered to have higher risk.
- You can choose to park in a car park. Insurance believes that if the car is parked in a secure garage, the risk is lower than when it is parked on a street.
The second criterion used to calculate the automobile insurance policy premium is the vehicle’s characteristics
The insurance company considers the following factors when calculating the premium: the vehicle’s brand and model, purchase price, year of circulation, year of production, type of engine (petrolel, diesel, gpl hybrid, electric ). Sometimes, Argus is taken into consideration.
The general logic is that the more valuable the vehicle, then the higher the insurance premium.
Third criterion: The level of guarantees
The level of insurance guarantees also affects the insurance premium. The more you pay for car insurance, the more expensive it will be. There are two main types for automobile insurance:
- Self-insurance for third parties: Minimum guarantee level & lower prices. Your insurance will only cover damage to third parties if you are directly responsible for the accident. If you are not responsible, the insurance of an accident manager will compensate.
- Self-risk insurance: High level of guarantees & higher prices. All-risk insurance provides the highest level possible of guarantees. They are the most costly.
It is important to know that you may also be able to get better third party insurance for your car. This is third party insurance that comes with optional guarantees like theft, fire or broken ice.
You might be interested in choosing insurance per mile if your vehicle is used very little. The premium for this type of insurance is determined by how many miles you drive with your vehicle.
You must notify your insurer if your situation changes (moving, for example) or your vehicle. Your auto insurance company might ask you to sign a new contract or reassess your insurance premium depending on the changes in your situation.
It is important to know that your insurance company may unilaterally terminate your contract if you fail to notify them about any changes in your life.
Your penalty bonus will also impact the amount of your auto insurance policy premium.
The bonus-malus refers to a coefficient that is between 0.5, 3Your insurance premium will be affected by a.5 This coefficient is adjusted each year based upon the claims you have made. For example, if your insurance premium is 500 euro per year and you have a coefficient 2 you will be paying 1,000 euros
This bonus-malus can only be calculated based on your driving. It does NOT take into consideration the type of vehicle.
This guide will provide more information on this coefficient and how it is calculated.
2 tips to help you choose your car insurance
We recommend that you contact more insurance companies to compare quotes if you are looking to purchase (new) car insurance. You must also consider the level of guarantee when comparing quotes. One quote may be more expensive than another, but it might offer more guarantees.
We recommend that you look into kilometer insurance if your driving habits are very low. They will be much more beneficial to your situation. This type of insurance is offered by many companies.
What should you do if your automobile insurance is sued?
These steps are required if you have a dispute regarding your insurer’s insurance premium, termination of the contract, application of deductible or compensation.
- For a solution, consult your broker or agent.
- If there is no solution to your problem, you can contact the complaint department in writing.
- The insurance mediator is available.
- Keep your car insurance up to date before the courts. You must accompany an insurance lawyer if you bring a dispute before a tribunal of grande instance (which has been a Judicial Court since Jan 1, 2020).
Please note that the mediator must be taken into custody within two months to one year of the receipt of the complaint letter.
Find out more about the terms of recourse if you have a dispute regarding your insurer. See our complete guide: “Automobile insur: What to do in case of a dispute avec your insurer” .