Do you need CASCO for a car loan, buying a new or used car? Pros and cons of the policy

General provisions

Unlike compulsory motor liability insurance, which is mandatory, we will consider voluntary CASCO car insurance. From which it follows that no one is obliged to formalize it. According to the law, a compulsory motor liability insurance policy is sufficient for trouble-free driving. But whether it is worth taking out such insurance can be decided by assessing all its advantages.

So, let's answer the main questions:

1. Is it necessary to take out CASCO insurance for a new car in 2019?

No, not necessarily, since the law does not classify it as a compulsory type of insurance.

1. Should you choose this type of insurance when purchasing a vehicle?

Whether it is necessary to issue a CASCO policy for a new car is up to the car owner to decide. But if he wants to minimize the risk of losses associated with damage or loss of his vehicle, then it’s definitely worth it.

What insurance to use in case of an accident

If you have both policies, choosing one of them depends on your specific situation.

1. The other driver was at fault for the accident and your car was damaged. In this case, you can choose any policy. If the amount of damage is less than the limit of 400,000 rubles, you can use compulsory motor liability insurance. If you choose CASCO, remember that when you pay for the policy next year, an increasing coefficient will be applied to you, since you were not the culprit, but a participant in the accident.
2. The insured person was at fault for the accident. In this case, OSAGO covers the damage caused to the injured party (up to 400,000 rubles), and you receive compensation for damage as the owner of the CASCO policy, according to the terms of the agreement.

Important.

If the driver was driving at the time of the accident:

• not specified in the policy;
• without rights or with invalid rights;
• under the influence of alcohol or drugs;

The CASCO insurer recognizes such cases as non-insurance and has the right to refuse payment of compensation. The MTPL insurer in any of these situations is obliged to compensate for the damage, but may put forward recourse claims, i.e., recover the amount paid from the culprit.

Thus, a compulsory MTPL policy is necessary regardless of whether you plan to take out voluntary CASCO insurance or not.
OSAGO saves you money on compensating the injured party in the event of an accident. And you are guaranteed to be paid compensation if you or your car were injured as a result of an accident. And the CASCO policy, in turn, allows you to cover the costs of repairing your car both in the event of an accident and other force majeure circumstances. That is, it is not necessary to buy a CASCO policy if you have compulsory motor liability insurance, but it is advisable. Taking out both types of insurance allows the car owner to feel as protected as possible. Buy online

What does CASCO cover?

For what risks and damages is the insurance premium charged by the insurance company under CASCO terms? Purchasing this type of auto insurance will allow you to receive compensation for certain damages. So, damage caused to the vehicle is subject to compensation:

• in case of an accident;
• illegal actions of third parties;
• exposure to uncontrollable natural phenomena (flood/earthquake) and uncontrollable processes (fire, fallen tree, deer running onto the road).

Attention!

For full CASCO insurance, you can also receive compensation for damage caused by the complete destruction and theft of a car. A partial policy will only protect you from damage caused by damage to the car.

Pros and cons of insurance

The undeniable advantages of this type of insurance include:

• complete protection of the car from any, including unforeseen, situations;
• the presence of additional bonuses to the main contract: technical assistance on the road, emergency commissioner, tow truck services;
• the ability to issue a policy on individual terms beneficial to a specific client;
• full coverage of damage from an accident, regardless of the degree of guilt of the owner;
• no need to worry about your property in cases of long departures or parking in disadvantaged areas;
• compensation for damage resulting from exposure to natural elements.

Disadvantages of CASCO, which should be taken into account when drawing up an agreement:

• high cost of the policy, which must be renewed annually;
• the obligation of the car owner to provide documents confirming the fact of the accident;
• possibility of fraud on the part of the insurer. To reduce costs and refuse payments, insurance companies can include clauses in fine print in the contract;
• a prerequisite for theft insurance is the installation of special protective equipment on the car;
• the need to provide a large package of documents.

What does the cost of CASCO depend on?

Every car owner who is thinking about the need to purchase CASCO car insurance calculates the amount that needs to be paid. A voluntary insurance policy will protect against possible risks specified in the standard contract. In addition, you can take advantage of additional paid services provided by partner companies.

When applying for insurance, people who do not know how to get CASCO insurance cheaper should take into account that insurance for a new car may cost less due to the lower degree of wear and tear.

The cost of the policy in 2021 will be determined based on:

• car prices;
• the year of its release;
• list of services provided for by the terms of the contract;
• that part of the cost of the car that is being reimbursed;
• franchise conditions;
• degree of wear;
• driver's experience and driving quality;
• availability of security systems.

On a note!

Many car owners, in order to reduce the cost of the contract, insure not the whole car, but part of it. The minimum amount is 30% of the price of the vehicle. It is important to understand here that compensation will be accrued only within the insured value.

How to choose an insurer?

To ensure guaranteed receipt of compensation for losses caused to a new car in an accident, you should pay special attention to the choice of an insurance company, taking into account:

• fame and reputation of the insurance company;
• the length of time the company has been operating in the insurance market;
• making payments and their type (money, repair work);
• reasons for the insurance company's refusal to provide compensation.

It is better not to take out insurance at the dealership where you purchase the car, because you can find more interesting and favorable conditions in other companies. Registration of CASCO when purchasing a new car is a smart decision. Insurance costs will be disproportionately less than the compensation to be received in case of theft, accident or any other insured event.

Credit CASCO

As for credit cars, which, according to the bank’s terms, must be insured with full CASCO insurance, there are many pitfalls. A high franchise level and many refusal situations make the conditions less profitable, but cheaper. For example, a deductible is deducted from a credit insurance contract in the amount of 5% for damage and about 10% for theft.

On a note!

In the regions, it is more profitable to purchase a CASCO policy, since in the periphery there is a lower percentage of accidents. Consequently, the insurance company has a lower risk of paying compensation, so a lower price is set.

Do I need to take out a loan for a new car?

This question is very relevant, because paying CASCO and interest on the loan can significantly increase the cost of the car. Before applying for a loan, be sure to calculate what expenses you will ultimately incur.

Registration of CASCO may be a prerequisite if you buy a car on credit. It all depends on the bank you contact. Compulsory CASCO insurance is a guarantee for the bank. This way, he protects himself from the risk when the client may lose his solvency due to an accident, and he will need money to repair the car.

Is it possible not to pay?

As mentioned above, mandatory CASCO registration for a car purchased on credit is a condition of the bank. But not all organizations adhere to it. In some banks you can get a car loan without the requirement of compulsory CASCO insurance. Let's look at them in more detail in the table.

Possible punishment from the bank

If, according to the terms of the loan, the client must take out car insurance within a certain time, but did not do so on time, the bank has the right to influence the payer as follows:

• charge penalties and fines in the form of a fixed amount or a percentage of the amount of debt;
• increase loan interest rates to the level of lending rates when CASCO registration is not mandatory;
• foreclose on the collateral;
• demand full repayment of the loan within a short period of time (at least a month).

But often banks make a compromise and, before performing any of the listed actions, warn the client about this several times.

There are other interesting and useful materials on CASCO on our website:

• What types of full and partial insurance are there, as well as details about CASCO Mini.
• Nuances of obtaining a policy for taxis and motorcycles.

How not to buy this car insurance?

If you have chosen a lending program that provides for compulsory car insurance, then you will not be able to enter into an agreement with the bank without paying for it. To avoid paying for CASCO, you can follow these tips:

1. Choose a car loan whose terms do not include CASCO car insurance .
   But it is important to understand that the bank’s conditions in this case will be more stringent, since its risks increase. Thus, price parameters for the borrower may turn out to be absolutely unprofitable. The interest rate may exceed 30%. The borrower will also need to pay various fees for receiving the loan. It is worth noting that when applying for such a loan, banks will be very picky about the experience and credit history of their client.
2. Registration of insurance under a franchise. This option is more suitable for experienced drivers. However, banks do not particularly encourage it. Such programs provide for a significant reduction in the amount of insurance premiums. After all, the borrower will be able to repair any minor damage to the car himself.
3. Including the cost of insurance in the principal amount of the loan. In this case, the loan amount will increase for the borrower, but the risk of losing the vehicle, and with it the bank’s commission, will decrease.

Cost of full CASCO

The policyholder can be sure that full CASCO insurance from a reliable partner cannot be cheap. For its risks, the insurer takes at least 6.5-10% of the insured amount. The deductible can range from 0.5-1% for damage and 0-10% for theft. Additionally, individual companies take into account the costs of towing the car into the total cost.

It is in the interests of the insurance company to pay less compensation, but at the same time increase its customer base. For these purposes, attractive tariffs are established, which interested people “rush” to. But such beneficence is compensated by a high percentage of deductibles. Due to these deductions, the company gains revenues that were not received at first.

Who can save on insurance?

Drivers who have a good driving history can reduce the cost of their policy. For each year of accident-free driving, a discount is assigned. Let's look at the main savings opportunities:

1. Accident-free driving record and total driving period. Drivers with extensive experience receive large discounts.
2. Wholesale insurance. This condition is relevant for legal entities that have entire fleets of vehicles.
3. Long-term cooperation with one insurer. The longer the period of cooperation, the more favorable conditions the companies guarantee.
4. Cooperation with new insurance companies. Newcomers are ready to offer more loyal client conditions, to the detriment of their earnings. This is done to attract a customer base. But in this case, you need to be prepared for the fact that these companies save on service.
5. Installation of security systems. Having an alarm, navigator and other security systems will help you get a discount.

Buying a policy: which is better - a car dealership or an insurance company office?

There are several options for where to purchase a policy. This could be an insurance company office, a car dealership, or an insurance dealer. There are no restrictions. If you already have a car, then the purchase is formalized at the insurer’s office. This is the most common practice. When purchasing a car at a car dealership, CASCO is purchased there, it is much faster. Although it is worth remembering the disadvantages that exist when buying a car at a dealership: It is impossible to get a discount on the policy.

1. There are high prices that are higher than the national market average.
2. There are some limitations in choosing an insurance company.
3. It is not always possible to obtain competent advice specifically on insurance services.

Nobody says that such shortcomings exist everywhere. But you need to be able to assess the situation yourself. It may be better to visit the insurer's office and buy a profitable financial product.

Reader Questions

• Question one:
  I’m taking a car from a car dealership and planning to get a loan.
  What type of CASCO insurance will be more profitable for me to apply for? Answer:
  If you are applying for a car loan for a vehicle, then obtain information from a bank employee regarding the insurer and CASCO conditions. Often, financial companies do not leave the client a choice when recommending their insurer and contract requirements.
• Question two:
  What is a deductible, and how does it affect the amount of compensation?
  Answer:
  The deductible is understood as a certain amount deducted from the insurance payment. The franchise percentage specified in the contract will allow you to calculate the amount of funds that you will not receive in the end. If, for example, the amount payable was 40 thousand rubles, and the franchise percentage was 10%. As a result, instead of 40 thousand, you will be charged only 36 thousand for the policy, since 4 thousand. This is beneficial only when taking out insurance. In the event of an accident, if the damage is 10,000 rubles, you will no longer be paid 6 thousand instead of 10,000 thousand, since 4 thousand will be spent on the franchise. Thus, the damage is up to 4,000 rubles. is covered by the policyholder at his own expense; everything above this amount is paid by the insurer.
• Question three:
  What is the statute of limitations for CASCO disputes?
  Answer:
  St. 966 of the Federal Law on CASCO, determines that the limitation period for CASCO agreements is two years. Not all legal experts are unanimous in their opinion on what period to start counting from. The first believe that time should be counted from the moment of refusal of compensation. Others believe that the starting date is the day of the insured event. In practice, the second option is more common.

Purpose and advantages of OSAGO

According to Article 4 of Federal Law No. 40 of April 25, 2002, OSAGO is compulsory motor third-party liability insurance. You cannot legally drive a car without a compulsory motor liability insurance policy: this, like a driver’s license, is a mandatory document.

Having stopped the car, the traffic police officer has the right to check the driver’s compulsory motor liability insurance policy. Its absence entails an administrative fine in the amount of 800 rubles. The amount of the fine may seem uncritical to many car owners. But the absence of compulsory motor liability insurance in the event of an insured event can lead to much more serious expenses.

OSAGO does not insure the vehicle itself, but the driver’s civil liability in the event that he is the culprit of an accident, as a result of which people or property of third parties were injured. This means that if you are at fault for the accident, the insurance company will pay the damages to the injured person instead of you. You need to restore your car yourself.

The victim receives payment for an insured event only if the insurance company knows exactly who caused the accident. The table will help you understand who will compensate for the damage.

*except for non-contact road accidents and cases of damage to other property. In this case, compensation is paid by the victim's insurance company.

The amount of compensation paid in each insurance case is calculated individually according to the contract. The state-established limit for restoring a damaged vehicle is no more than 400,000 rubles. Often this amount is not enough to cover losses. Then the victim can file an application in court and demand that the person responsible for the accident compensate for the damage.

Compensation for each victim is no more than 160,000 rubles when concluding an insurance contract before April 1, 2015 and no more than 500,000 rubles after the specified period.

To apply for an MTPL policy, it is not necessary to contact the office of the insurance company - you can issue an electronic policy online and print it from your personal account or save it on your smartphone as an electronic document.

The cost of the policy is individual for each car owner. To calculate the cost of compulsory motor liability insurance, you must indicate:

• region of registration of the vehicle owner;
• information about the car: make, model, power;
• information about drivers allowed to drive.

If the owner of the vehicle does not have a driver’s license or it is unknown who can drive the car, you must select the “Drivers without restrictions” option, specify the owner’s data and extended information about the car. In this case, you can trust any person with a driver’s license to drive the vehicle.