The car insurance contract: understanding the issues

Have you just bought a new vehicle or are you looking to change your car insurance? Whatever your situation, it is important to understand all the issues involved in a car insurance contract. Much more than a simple administrative formality, this type of contract must ensure you optimal protection at the best price.

Car insurance, a mandatory contract

Since 1958, all motor vehicles must be insured, whether they are on the road or in the garage. This obligation is governed by the Insurance Code and the Highway Code: in case of lack of insurance, the owner of the vehicle is exposed to a fine of 3570 dollars, and in some cases, to a prosecution before the criminal court.

If having a car insurance contract is therefore essential, you are free to choose the formula that best suits your needs and your budget. Only third party liability coverage, also called third party car insurance, is mandatory.

Third party car insurance allows you to cover bodily injury and material damage that your car may cause to others. By choosing a more comprehensive plan, you can also cover your own medical and repair costs, even in the event of an at-fault accident.

How to choose your car insurance

Most insurance companies offer car insurance policies, with third-party, intermediate and comprehensive plans. When choosing your car insurance, you must take into account a certain number of elements, the amount of the annual premium not being the only criterion to retain.

For example, from one company to another, the extent of coverage varies, as do the reimbursement limits and the amount of deductibles. Finally, it is essential to detail all the guarantees offered. Some insurers will offer you a third-party formula with simple civil liability, while others will add legal protection or 24-hour assistance to this basic contract.

You must take the time to define which guarantees seem essential to you, and check the conditions of reimbursement in case of a claim.

If all this research seems tedious, you can also turn to a car insurance broker, who will find an offer that is consistent with your needs.

How much does car insurance cost?

The method of calculating the amount of your car insurance premium is freely determined by each insurance company. Broadly speaking, the cost of your car insurance is determined by

  • your profile as a driver (age, bonus-malus, date of obtaining the driving license) ;
  • the characteristics of your vehicle (date of the first registration and putting on the road, fuel, power, argus rating);
  • your place of residence, and the place where your car is parked;
  • the possible secondary or occasional drivers;
  • the use you make of your car (daily commuting, private trips only…).

The amount of the premiums of your contract also varies according to the formula chosen, the guarantees or the added extensions.

How do I apply for car insurance?

When you apply for insurance, your future insurer must give you a certain amount of information on the guarantees and exclusions of the proposed contract as well as on your obligations.

They must also provide you with a standardized information document on the proposed insurance product.

Generally, the insurer will give you the standardized information document along with a detailed estimate, established thanks to several documents

  • your car’s registration certificate;
  • your driver’s license;
  • the statement of information, provided by your former insurer, showing your last five years of driving.

This quote does not commit you to anything, and you can use it to compare several car insurance companies.

Once you have chosen your coverage, all you have to do is sign your contract. You will then receive your insurance certificate, also known as a “green card”, on which you will find your name, the number of your contract, the license plate of your vehicle and the validity dates of the contract.

How to cancel your car insurance?

Have you found a cheaper insurer than your current one, for equivalent coverage? Since 2015, you can easily ask for the cancellation of your car contract, provided that it is at least one year old.

Other specific cases (sale of the vehicle, change of personal situation…) allow you to put an end to your insurance.

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