How to truly know what you’re paying for car insurance
Car insurance is compulsory for every car owner, but the premium you pay can vary significantly. Not just per insurer, but also depending on your personal situation. The amount of your premium is determined by various factors. Have you recently moved? That will impact your premium. It’s then wise to recalculate your car insurance premium. Even a small change, such as a different postcode or a new car, can affect the monthly amount you pay.
Why should you regularly recalculate your car insurance?
Many motorists take out car insurance and then don’t look at it again for years. However, it’s wise to occasionally recalculate whether you’re still on the best deal. Premiums change regularly, and your personal situation isn’t always the same either.
Perhaps you’ve bought a different car, accumulated more no-claims bonus years, or moved house. These factors could mean you qualify for a lower premium or would be better suited to a different insurer.
What factors determine the premium?
Car insurance premiums are tailored. Insurers calculate them based on, among other things:
- Age and experience: Younger drivers often pay more because they statistically carry a higher risk.
- Car type: Heavier or more expensive cars have a higher premium due to repair costs.
- Number of no-claims years: The more years without a claim, the higher the discount (no-claims bonus).
- Place of residence: In urban areas, the risk of damage or theft is greater than in rural areas.
- Car usage: Someone who drives to work daily pays more than someone who only uses the car for private use.
By entering this information into an online tool, you can easily see how much premium you would pay and if switching is a smart move.
Different Coverages
Car insurance comes in three forms:
- Third-Party (legal liability): compulsory, only covers damage to others.
- Third-Party, Fire & Theft: also covers damage due to fire, storm, theft, or broken windows.
- Comprehensive: the most extensive cover, including damage to your own vehicle.
For new cars, comprehensive insurance is recommended, while older cars are often better off with third-party or third-party, fire & theft cover.
Additional Insurance Options
In addition to the basic insurance, you can choose extras, such as:
- Breakdown assistance: useful if you’re often on the road;
- Legal assistance: legal aid for damage claims;
- Passenger accident insurance: compensates for personal injury or material damage to the driver and passengers.
These options are not compulsory but can offer significant financial security in case of accidents or disputes.
Liability and Risks
Not everyone knows that car insurance also applies even if you’re not driving the car yourself. Even if you’re not driving the car, as the owner, you are liable for any damage (source). This means you remain responsible for the consequences of accidents or damage caused by your car, even when someone else is behind the wheel.
What does your insurance allow?
Therefore, always make sure you know who is using your car and check if your insurance policy permits it. Some insurers only cover damage if the main driver is at the wheel, while others also allow occasional drivers.
When is it advisable to recalculate?
It’s smart to check at least once a year whether you still have the right car insurance. Times when it’s particularly advisable to recalculate include:
- After moving house;
- After purchasing a new car;
- If your no-claims bonus years have increased;
- If you drive fewer kilometres than before.
A recalculation can sometimes save hundreds of euros per year, without compromising on cover.
The Role of No-Claims Years
No-claims years significantly influence your premium. Every insurer operates a bonus-malus system: the longer you go without claiming damage, the higher your discount. However, as soon as you do report damage, your discount can drop considerably.
It is therefore sometimes more advantageous to pay for small damages yourself, especially if the costs are lower than the increase in your premium.
Keeping a Grip on Your Car Costs
Calculating car insurance is not a complicated task, but it provides a lot of insight. By checking annually whether you still have the right cover, you avoid paying unnecessarily too much. Furthermore, you remain assured of the correct protection, tailored to your driving behaviour and personal situation.
