Vehicle insurance or auto insurance is a broad term for many different types of insurance aimed at covering damage or loss of a vehcle. Vehicle insurance in many countries around the world is mandatory.
The European Union has a fairly uniform legislation on motor vehicles. Most important is the protection of victims of road accidents involving a motor vehicle. This protection is regulated through a mandatory liability insurance for motor vehicles.
Moreover, this requirement does not apply to vehicles owned by the central government (such as Public Works, Defence and National Police).
Vehicles for central government is that they are exempt from the liability insurance. The certificate of exemption must always be in the vehicle. A car cover roughly consists of three components, whose liability coverage is required: Liability coverage, limited hull coverage and full hull cover.
This coverage may, if desired, be extended with additional insurance, such as an occupant or legal aid coverage.
The resulting price of insurance depends on the following criteria:
– the volume of motor vehicles,
– vehicle weight,
– how vehicles is used,
– age of the vehicle,
– legal status of the policyholder/operator,
– age of the policyholder/operator,
– occupation of the policyholder/operator,
– additional insurance from the same insurance,
– frequency of premium payment,
– number of months without an accident,
– amount of damage,
– amount of credit limits,
– use of winter tires, etc.
Liability coverage is legally required by the motor vehicle liability insurance Act. It requires not only having a liability coverage, but also provides the minimum insurance requirements to be met.
The bonus-malus system rewards drivers with an claim-free lower premiums and penalizes drivers with a higher premium. The bonus-malus system works with a bonus-malus scale. The ladder consists of a number of steps (typically 15 to 20). Each step is a discount on the attached premium.
After one year with no claims to the insurance, this moves you a step higher on the ladder. After a year in which one or more damages are claimed the insured drops a number of steps, usually about five, that is, where claims occur. The ladder usually starts at 25% surcharge and ends at 75 or 80% discount.
Other insurers use the no claim bonus system to reward their claim-free customers, every five years you do not claim you receive a stipulated amount of money straight into your bank account.
The hull limited coverage can be completed in addition to the liability coverage, and it covers:
– Fire, explosion, short circuit, auto-ignition, lightning;
– Theft, embezzlement, joyriding;
– Broken windows, including damage by shrapnel;
– Storm, flood, avalanche, landslide or other natural disaster;
– Collision with stray animals or overhanging game;
– Riots / disturbances;
– Transportation of the wounded, etc.
The accident insurance provides a lump sum when one of the occupants including the driver, dies or becomes permanently disabled. The maximum amount of benefit is determined by the policyholder.