Insurance Many Finns have acquired their own car during a pandemic, what do you need to know about car insurance? “He who competes gets the best price”

The comprehensive insurance policies of the same name offered to motorists by insurance companies are different in terms of both price and content.

Coronary pandemic hit hard on the business of many companies, but it did little to slow down the trade in used cars.

CEO of the Automobile Association Pasi Nieminen identify the trend. He believes the well-run car trade was due, at least in part, to people acquiring their own cars for their business trips.

“It was really the only safe way to travel somewhere during a pandemic. The importance of owning a car was emphasized in running everyday life, ”says Nieminen.

This means that many Finns have also had to take out car insurance.

Car insuring can seem like a difficult and complex process. What insurance should be taken out for the vehicle, from which company should it be obtained and what are the different conditions attached to the insurance?

There is no simple and one-size-fits-all answer to this question. Nieminen says that in recent years there has been more real competition between insurance companies in car insurance.

“Four years ago, a reform of the Motor Insurance Act was introduced that added these elements of competition. It would seem that there has been more competition. But consumers are crucial in determining whether or not there is competition. ”

This is Nieminen’s most important and central message. According to him, it is definitely worth asking for motor insurance outside of your own familiar insurance company.

“It’s worth it. In the same context, you can also compete with all other insurances. The one who competes gets the best price.”

The bonus level for a young driver is typically in the range of 30-40%.

Insurance of course, you should be careful in the competition. Packages from different insurance companies may have almost the same name but contain different terms.

Statutory motor insurance must be taken out for vehicles used in Finland. Its field of indemnity is defined by law, ie its content is in principle the same for every insurance company.

Motor third party liability insurance covers personal injury caused by a traffic accident and property damage caused to third parties. In the event of a crash, it will compensate for damage to the innocent party’s vehicle but not for damage to the offending party’s own vehicle or property.

The most significant differentiating factor between the motor insurances of different insurance companies is the price, but there are other differences in the offers.

Perhaps the most significant of these differences is the bonus offered by insurance companies to car owners. Simplified, bonuses reduce annual premiums according to a certain table if no damage occurs.

“If damage happens again, there will be a certain increase in the fee. A risk-free driver pays a lower fee, ”says Nieminen.

Insurance companies differ in how quickly the bonus goes up for drivers driving without injury, but also in how quickly they lose their bonus after an injury.

Fresh drivers typically start at a bonus level of 30-40%, and the maximum bonuses are often around 70-80%.

More what can be found can be found in voluntary motor insurance, ie casco insurance in everyday language.

Casco insurance covers claims to a greater extent than statutory motor insurance, but their content varies greatly both between different options of the same insurance company and between insurance companies.

“Traditionally, there has been a hull that does not compensate for damage caused by the driver to his own car, but compensates for damage caused by, for example, fire, theft or a deer crash. Or if the car gets on the road, the car repair shop will be reimbursed for the costs of driving, ”Nieminen describes.

At the next level of compensation, damages caused by the owner to his own car are covered, ie in practice, for example, damage caused to the car by Kolari.

“Then there are premium products, which also include, for example, a replacement car or legal expenses insurance if you have to argue about matters related to motor insurance.”, Nieminen says.

Some companies include services such as windshield protection in the most expensive premium packages of all. In part, they are sold as separate additions to the selected insurance.

“In principle, insurance premiums correlate with claims.” – Pasi Nieminen, CEO of the Finnish Automobile Association

Motor insurance and when calculating the price of comprehensive insurance, insurance companies want to know not only the details of the car being insured but also the identity of the policyholder.

This allows companies to check the policyholder’s insurance history and calculate his or her bonus for the price of insurance. At the same time, they receive information about, among other things, the age of the policyholder.

“Basically, insurance premiums correlate with claims. New and young drivers have a higher accident rate, which should be reflected in insurance premiums. The risks also increase in the older end, so you might think that the fees will increase there as well, ”Nieminen estimates.

However, he points out that the effect of the age at which an insurance policy is taken on also depends on how the insurance company wants to position itself and what kind of customers it seeks.

Finanssialan According to the annual report, measured by the market share of non-life insurance, the four largest insurers in Finland are the OP Bank Group, the Lähi-Tapiola Group, If and Fennia.

In the example case, insurance was sought for the Volvo S40, which was introduced in 2006 and was estimated to cover about 15,000 kilometers a year.

The insurance was applied for by a person under the age of 30 who does not have a previous insurance history.

Of the three insurance companies compared, the largest bonus for motor insurance was offered by Fennia, 52 per cent. Pohjola Insurance, which is part of the OP Bank Group, would give a 40 per cent bonus to first-time motor insurance and an If 30 per cent bonus to If.

Fennia also has the cheapest motor third party liability insurance, EUR 547. Pohjola Insurance would receive motor insurance for EUR 627, Lähi-Tapiola for EUR 629 and If for EUR 781 per year.

In practice, the car owner has to consider whether he takes the risk himself or whether he pays the insurance company to take the risk.

Companies give bonuses that seem like comprehensive insurance to a new motorist, Pohjola and Fennia 70 per cent and If 80 per cent. Of course, bonuses decrease if you have to cover damages from comprehensive insurance.

All three of the companies call their most affordable hull options shareholder shares. However, their contents differ.

In all companies, the shareholder is entitled to compensation for litigation costs, theft and fire damage. However, none of the shareholders will reimburse the costs incurred by Kolari for his own car.

If, Lähi-Tapiola and Fennia include, for example, vandalism compensation and towing a vehicle from the scene of an accident to a repair shop, Pohjola does not.

The shareholder funds of If, Lähi-Tapiola and Pohjola again include compensation for damage caused by an accident abroad, Fennia does not.

There are also differences in compensation for animal crashes. If, Lähi-Tapiola and Pohjola are already compensating for damage caused by all kinds of animal crashes. Fennia includes damages from deer crashes in the shareholder base, but the remaining animal crashes are only reimbursed in the most expensive comprehensive insurance.

In the example case, Pohjola’s share capital would have paid EUR 686 per year, Lähi-Tapiola’s share capital EUR 777, If’s share capital EUR 834 and Fennia’s share capital EUR 636 per year.

Just motor insurance prices are to some extent comparable because they fundamentally replace the same statutory matters.

However, as the example of the case shows, it is difficult to compare the prices of comprehensive insurance because the content of insurance contracts differs. The example used in the story does not even compare differences in deductibles or compensation ceilings.

Nieminen emphasizes that everyone will eventually have to think for themselves what the real value of the insured vehicle is and how much they are willing to pay to insure it.

In practice, the car owner has to consider whether he takes the risk himself or whether he pays the insurance company to take the risk.

According to Nieminen, there are two basic questions: what is the value of your car and the sustainability of your finances?

“So can a reasonably affordable car be kept with the risk that if something happens, the costs will have to be covered in one’s own bag?”

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