Coover "Auto Insurance" What is an auto insurance premium?
What is an auto insurance premium?
To drive legally, you must have taken out car insurance (at least Civil Liability coverage). Beyond this mandatory nature, it is essential protection to avoid paying crazy sums in the event of damage. The auto insurance premium is what you have to pay to benefit from the guarantees in your contract.
What exactly does it correspond to? How is the auto insurance premium calculated? What do you risk for the non-payment of the premium? And in times of Covid, can the premium be adjusted? Our responses.
Summary
The auto insurance premium: definition
How is an auto insurance premium set?
Auto insurance premium and Covid: can you request a reduction?
How to reduce the amount of your auto insurance premium?
Why is my auto insurance premium increasing?
What are the risks for non-payment of the auto insurance premium?
The auto insurance premium: definition
In the field of auto insurance, the premium is the annual amount that you must pay to benefit from your guarantees. In other words, this is what the insured must pay to be covered by the insurer under the terms of their auto insurance contract.
The better your guarantees, the higher your auto insurance premium! For example, if you choose the all-risk plan, adding one or two optional guarantees, you will logically pay more if you only opt for the intermediate plan.
Also, be aware that it is reassessed every year. It actually depends on many factors, which we detail in the next section.
Contributions are monthly (or quarterly), while the premium does represent the annual cost of coverage.
How is an auto insurance premium set?
The calculation of the auto insurance premium is based on various elements:
The driver's profile: for example, a person on a probationary license will be charged a higher premium because he has little experience. Age is also an important criterion for auto insurers.
The car, and more specifically the replacement cost of the vehicle, its model and horsepower.
How much use do you make of the vehicle: approximately how many kilometers per year? For personal trips only or to get to work? etc.
Your bonus-malus coefficient (reduction-increase coefficient) and the driver's background.
Compensation terms, such as ceilings, waiting periods and more particularly the deductible.
As seen previously, the level of guarantees affects the amount of your auto insurance premium. Third party coverage, the least protective, is the most affordable. It can be interesting for drivers who use their vehicle very little. It's up to you to decide according to your needs and budget!
Auto insurance premium and Covid: can you request a reduction?
In times of confinement, your movements are considerably reduced. Your vehicle stays in the garage more than it is on the roads!
You can request a reduction in your auto insurance premium in times of covid. Indeed, the Insurance Code provides that in the event of a reduction in risk during the contract, a reduction in the amount of the premium may be claimed.
To adjust your premium, you must make a request to your insurer by mail, indicating the number of your contract and invoking the reduction in risk due to less frequent trips. The reimbursement of the auto insurance premium due to covid is never total, but according to insurers, you can expect good discounts or offers.
A particular situation specific response: some insurers have decided to make a financial gesture. Several insurers have announced the freezing of their car prices in 2021, or even 2022 (Matmut, Maif, Crédit Mutuel, etc.).
How to reduce the amount of your auto insurance premium?
Do you find that you are paying too much, want to reduce your budget devoted to insuring your vehicle? Here are some ideas for lowering the cost of your auto insurance:
Opt for third party or intermediary coverage without optional guarantees, or with the most essential guarantees in your eyes.
Changing the amount of your deductible will also allow you to reduce your contributions. The deductible is the amount that remains at your expense after compensation. Thus, the higher the deductible, the lower the premium.
Adopt careful driving: a driver with a good bonus malus coefficient is likely to reduce the amount of his car insurance premium.
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