Do you need CASCO for a new car: is it worth it and how to choose a policy when buying a car for cash

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:

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.

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.

Insurance Coverage

When purchasing a policy, you must know in what cases insurance payments are provided. When applying for CASCO insurance coverage includes the following:

Damage to your own car as a result of a traffic accident.
Insurance pays out if a car is stolen, or its individual parts are stolen. In some cases, this may require additional agreement.
Damage to a vehicle as a result of natural disasters.
Breakdowns caused by the actions of third parties.
Those cases when the machine is damaged by falling objects or as a result of the actions of animals.
Causing harm to the driver or his passengers.

Even if insured events occur, there may be situations where payments will not be made.

This applies to the following situations:

If there is criminal intent on the part of the insured. This happens, for example, if fraud has occurred or the owner himself is to blame for damage to the car.
The machine was operated in violation of technical requirements. If the car was damaged because it was defective, then the insurance will not pay out.
The cause of the accident may be drunkenness or drug addiction. In this case, the company does not owe the driver anything. A similar situation arises in cases where he did not have the right to drive a car for other reasons.
Sometimes it happens that the car was in good working order, but was operated in violation of the rules. This occurs, for example, when overloading or in the case of teaching driving to third parties without proper permission. If these actions caused the accident, then there is no reason to expect payment.

If, upon the occurrence of an insured event, the company underestimates the amount of payment or refuses it, the policyholder, if he considers himself right, can contact the consumer protection society or file a claim in court.

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.

What are the benefits of CASCO insurance?

So, we’ll find out a little later whether CASCO is mandatory or not.

When purchasing a new car, people think that they will need to use it as carefully as possible, because ruining an expensive purchase is quite scary. However, no matter how hard the driver tries, various force majeure circumstances can always occur, which in no way depend on the care of the car owner.

Even if a motorist has extensive driving experience, there is no guarantee that an accident will not occur due to the fault of other people or that the car will become a victim of an event such as heavy rainfall, a falling tree or disasters.

Many people are wondering whether it is necessary to do CASCO insurance. If a person wants to provide for all possible risks and does not rely solely on luck, first of all, he should acquire such an insurance policy. In accordance with the law, this type of insurance is not mandatory, but taking out a policy will allow the car owner to get rid of a number of different problems. And even if during the term of this policy he never encounters any insured events, he will be able to save his money and nerves, since in the end the policy will cost him much less than repairing a car or, as often happens, undergoing treatment after an accident.

At the same time, not all drivers understand why they should take out CASCO insurance at all, since there is already compulsory insurance - compulsory motor liability insurance. In fact, these two types of insurance are fundamentally different, as they provide for completely different risks.

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.

Advantages and disadvantages of an insurance policy for a new car

Registration for a new car provides additional benefits:

Buying CASCO for a new car is cheaper than for a used one.
Insurers offer a large number of promotions and discounts to those who immediately purchase this policy.

The policyholder, having concluded the contract immediately after purchase, gets the opportunity to use insurance from the first day of owning the car.

Obtaining a policy at a car dealership is associated with the following disadvantages:

Small selection of insurers. More than three companies are rarely represented in the salon.
It is not possible to study information about insurers on site.
Lack of complete information about the services provided. Typically, standard contracts are concluded in the salon.
The cost is inflated because the salon receives its commissions from transactions concluded.
Typically, this does not provide the opportunity to participate in insurer promotions.

If possible, you need to independently choose a company to purchase an insurance policy.

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.

Features of the policy

Compulsory insurance helps ensure that only the interests of the car owner are protected against any other people who, through his fault, may suffer during an accident. When taking out CASCO insurance, full compensation is provided for repairs to the person’s car. The number of insurance cases under such policies is not limited by the state, and therefore insurers often offer coverage for almost all situations that can happen to a car. Today, they are developing a wide variety of insurance programs that allow them to meet the needs of each client, adding to the main contract only those risks that the policyholder wants to cover. After all, it is unlikely that anyone will decide to insure a car against theft if they leave it in a private garage or in a well-guarded parking lot, and refusing this risk will significantly affect the cost.

Is CASCO required or not?

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.

Disadvantages of a CASCO policy

But we cannot say that everything is so perfect in CASCO insurance. There are some drawbacks, the main one of which is the commercial basis of the company’s work. No insurance organization wants to just pay out money to its clients. Therefore, not very large and not entirely honest market players can use all sorts of loopholes in order not to pay compensation to the injured person. Therefore, before purchasing a policy, read reviews about companies, carefully read the insurance contract, find out all the smallest details. Otherwise, the company may use some kind of “loophole” to avoid paying out funds.

Other disadvantages of CASCO:

In the absence of an alarm or anti-theft device, the insurance company can increase the cost of CASCO significantly. There are companies that refuse to sign an agreement with such a client.
CASCO is not a cheap pleasure. At the same time, the cost is influenced by many factors - from the make of the car to its service life. But this does not mean that you will have to pay little for a domestic car. CASCO is expensive for all makes and models. This needs to be taken into account.
Receiving payment and filing an insured event is accompanied by a large amount of paperwork. This is a kind of bureaucratic process that is difficult to go through quickly and calmly. You need to be prepared for this in advance.
Human factor. Agents are interested in the client buying a policy. They can resort to various tricks, promising in fact what cannot be. And even if they have the opportunity to make a discount, they are running a promotion, not everyone can openly and honestly say about it.

All these disadvantages must be carefully considered.

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:

Accident-free driving record and total driving period. Drivers with extensive experience receive large discounts.
Wholesale insurance. This condition is relevant for legal entities that have entire fleets of vehicles.
Long-term cooperation with one insurer. The longer the period of cooperation, the more favorable conditions the companies guarantee.
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.
Installation of security systems. Having an alarm, navigator and other security systems will help you get a discount.

Special cases

We continue to find out whether it is necessary to apply for CASCO insurance. For vehicles purchased with personal funds, there is no such thing as “compulsory insurance,” since no one can force a person to take out a policy for himself, regardless of what the managers of the car dealership where he went to say. The only type of insurance that is mandatory for everyone is compulsory motor liability insurance, and without such a policy the driver does not have the right to drive his car without the risk of receiving a fine from the traffic police.

Tariffs for a CASCO policy are set separately in each company, and it is quite natural that the price of this insurance is often unaffordable for many car owners. At the same time, insurance organizations guarantee that in the event of an accident or other negative event, the car owner will be paid full compensation for damage.

Many people cannot immediately pay off the cost of a car, and therefore purchase it on credit. This is a rather convenient solution for those who need a car now, but do not have the full amount to purchase. Most often, when applying for a loan, banks specify CASCO registration as a mandatory item, and this is a completely understandable and justified decision, because it helps to get rid of risks for both parties to the agreement.

It should be noted that banks often offer their own insurance options, and the best option would be not to agree to such conditions, but to try to find an insurer who will issue an insurance policy on more favorable terms.

In most cases, if a client is interested in whether it is necessary to do CASCO insurance, the bank tells him that this requirement must be met only during the first year. At the same time, everyone understands that a car can be damaged or stolen at any time. An insured event often occurs unexpectedly.

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.

Should I take out CASCO insurance or not?

Regardless of whether a person knows about the pros and cons of CASCO or not, he wonders: does he need this policy. After all, not everyone’s car gets into an accident or is stolen from a parking lot.

For a new vehicle

If the car is only from a car dealership, then there is an increased risk of theft. This is confirmed by statistics. Therefore, when buying a car, CASCO is recommended, especially in the following cases:

When a car is purchased on credit. As a rule, it is impossible to get a car loan without CASCO insurance. This is due to the fact that the purchased vehicle is the bank’s collateral and is therefore subject to insurance. According to the legislation of the Russian Federation, collateral property is always subject to insurance.
The owner of the vehicle has just received a license or has little experience driving a vehicle, and therefore the risk of damage to the vehicle is several times higher than that of an experienced driver.

By the way, not all cars are subject to theft or the likelihood that this vehicle will be damaged is minimal. There are many statistics on which cars are most often stolen and which are not touched at all. You can view the following data. If the likelihood of your model being stolen is minimal, then you can do without CASCO.

If you have bought another car, and you yourself have extensive driving experience, the frequency of accidents with your participation is minimal, then it is also rational to refuse CASCO. The price is too high.

For a car older than 3 years

If the car has been in use for more than three years, then the likelihood of theft is minimal. Therefore, it is advisable to buy CASCO insurance only when the car is pledged to the bank or the owner has little driving experience. In other cases, CASCO is not so necessary.

With OSAGO in one place

When a driver purchases MTPL, he thinks that when applying for CASCO insurance, he must contact the same insurer. No. It's a delusion. An individual has the opportunity to choose where he wants to purchase the policy. OSAGO and CASCO insurance can be purchased from different insurers.

Some features of choosing an insurance company when purchasing CASCO or OSAGO:

You should only choose a reliable and financially stable insurer. Such information is available in the public domain on the RSA website and other resources. The assessment is carried out on the basis of financial statements. This way you can choose a company that will not be declared bankrupt in the near future.
Be sure to read customer reviews. At the same time, pay attention not to positive reviews, but to negative ones. You need to understand what weaknesses the insurer may have. We need to understand how ordinary citizens evaluate the quality of insurance company services.
If possible, then independently assess the adequacy of equity capital. The greater the company's capital, the more likely it is that its own funds will be sufficient to cover customer refunds.

Guided by these rules, you can easily choose a reliable insurer. Whether there will be one or two is the subject's choice. But if you simultaneously purchase CASCO and MTPL from one insurer, you can get a significant discount on services. This is due to the fact that the cost of compulsory motor liability insurance cannot fluctuate greatly, but for CASCO insurers can use various markup percentages.

Should I apply for CASCO insurance after the first year of a car loan?

Yes need. CASCO is a mandatory condition for car loans. The vehicle is the bank's collateral. And it is subject to insurance as long as it is pledged. In other words, until the borrower repays the loan, he will be required to purchase CASCO insurance.

An exception to the rule is car loans, where the car is not collateral. This is possible if you make a down payment of more than 50%.

CASCO policy is purchased annually. According to the lending agreement, this is the responsibility of the borrower. If he violates the rules, the company may ask to repay the loan immediately, terminate the loan agreement, etc.

What is the Europrotocol

This is the processing of insurance payments without providing certificates from the competent authorities. The procedure called “Europrotocol” provides for the availability of technical means of recording an insured event:

satellite navigation,
video shooting,
as well as photographs from the scene of the event, including on a mobile phone.

The procedure itself is still in the experimental stage; regulatory and legal issues have not been clearly worked out. Therefore, car owners are rightly afraid that they will not be paid CASCO insurance, because... Insurance companies don't want to pay for faked accidents.

How is the cost of insurance calculated?

The cost of a CASCO contract is a non-fixed indicator; it is influenced by the following criteria and characteristics:

The age of the owner and his driving experience.
Conditions and place of permanent operation of the vehicle.
Car storage place.
The cost of the car and the degree of its wear and tear.
Availability of an anti-theft system.

After collecting all the data, the cost of CASCO insurance is calculated, taking into account increasing and decreasing factors. With rough calculations, the price for a policy for a new car will be about 7-10% of its cost, for used cars – up to 15-20%. It will affect the final price and the range of services that the client wants to include in the insurance agreement.