The reality is that not everyone needs comprehensive insurance or the maximum coverage. Each driver has their circumstances and these will be the ones that determine the type of policy that must be contracted
Three types of insurance
Before giving you the keys on whether or not you need an all-risk, it is important to review what types of car insurance are on the market and what each one covers.
- Obligatory insurance. It is the minimum insurance established by law and covers what is known as Compulsory Civil Liability. In other words, it serves to pay for the damages you may cause to other people and things. If you get injured, they will not compensate you and they will not pay you for the damages that your car suffers. It is intended to cover third parties, not you.
- Third party insurance. From the basic insurance to the extended ones, it covers the Compulsory Civil Responsibility and adds optional coverage such as damage to the driver (compensation for death, disability and the payment of medical expenses if you have an accident), travel assistance (tow truck, among other things), theft and fire, moons or legal defense. What is still not covered is the damage to the car in an accident in which you are at fault or if, for example, you hit yourself.
- All Risk or Own Damages. It is the most complete insurance. In most cases, it groups together all the previous coverages (they do not have to be this way) and also adds the damages that the car may suffer in an accident in which you are at fault. It is a more expensive insurance and that is why insurers use what is known as a deductible, an amount of the compensation that will be borne by the insured (don’t worry, later we will explain better what it consists of).
In summary, the difference of all risk is that the insurer will also pay you compensation for the damages that your car suffers, whether or not you are to blame for the accident and there is or is not another driver involved. With this clear, is it a good idea to hire a franchise? Let’s see it!
Does a car insurance with franchise compensate?
Nobody likes to pay more, much less for something that they do not plan to use a priori. However, everyone wants security and that is where the business of insurers lies. Naturally, comprehensive insurance will always be more expensive than third party insurance. Precisely for this reason we ask ourselves if it is worth hiring him.
There are three key questions you need to ask yourself to answer the question:
The age of the car
This is the most important element. As a general rule, the older the vehicle, the less interesting it is to have it at all risk. From the OCU they pointed out a few years ago that an all risk only compensates up to the sixth year of the car’s life. From that moment on, an expanded third party would be more advisable.
The reason for this recommendation has to do with the way in which insurers compensate in the event of an accident for the damage suffered by the car. And it is that in the event of a total loss, your insurance will not always pay you what the car is worth on the market, but what your policy marks, which distinguishes between new value (what a new car would cost), the of market and the market value (marked by tables published by the Government). Normally, compensation varies as follows:
- During the first two years of the car, you will receive the new value. Your insurance will pay you what a new car would cost at the time of the accident.
- From the third year the market value or a percentage thereof.
- From the fifth year the market value of the car.
These scales will be maintained for any accident. So that you understand it better, if you have a 10-year-old car that for your company has a value of 2,500 euros and you have a blow whose repair costs 4,000 euros and exceeds this amount (for example, a change of parts that must be brought from abroad plus bodywork and paint work), the company will declare the car a total loss and will compensate you with 2,500 euros.
Your profile as an insured
This is a much more subjective profile that would be like the dream threshold when it comes to investing your money. In other words, the minimum security you want for your car and for yourself.
If you are one of those who, for work or aesthetic reasons, need the vehicle to always be perfect and spotless, the entire risk is for you, because it ensures that your vehicle will be repaired. In fact, there are companies like Mutua Madrilena that promote themselves by offering three installments a year without a premium increase. And it is that one thing you must be clear: the more you use the insurance, the more expensive it will be each year.
Think about how you want to have the car and what it would cost you to leave it for a while with a scratch (in addition to the economic cost of fixing it). That will help you make your decision.