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Does AutoInsurance cover us even if the renewal has not been paid?

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Normally, when we have not requested the cancellation of the policy, the Auto Insurance renewal occurs automatically and there are no problems with the Insurance coverage. But if the bank returns the receipt or there is a problem with the payment of the premium, the renewal of the policy is suspended. What happens then if at that moment we have an accident? Would Car Insurance cover us even if it has not been renewed yet?

It may seem a strange situation, but it happens more often than it seems: a problem with the bank, a change of account or, simply, a moment of lack of liquidity may be the reason why, when the insurance renewal occurs, the payment of the policy is not made effectively.

One of the conditions for an Auto Insurance to make its coverage effective is, precisely, the payment of the premium. In fact, the payment of the insurance receipt is one of the obligations assumed by the policyholder in the contract, when he is going to insure his car.

There are clients who have called us worried that they have had the bad luck of having a hit right after the Insurance payment failed. They thought that having not paid the renewal, they found themselves without the coverage of their policy and at the prospect of having to face the consequences of the accident. Fortunately, this is not exactly the case, since there is what is called the Insurance grace month or grace period.

The grace month is a protection that the legislation guarantees to the clients of Car Insurance so that they are not seen without coverage immediately after the expiration of their policy. Let’s see what this guarantee consists of:

According to article 15 of the Insurance Contract Law, if the policy payment is not paid in the renewal of the Insurance, the coverage will be suspended until one month after the expiration date. This implies that the insurer has an obligation to maintain coverage during this grace month.

This time should be used by the policyholder to catch up and correct any problems in the payment of the renewal of the policy. In fact, the Vehicle Insurance annuity would not start counting the day the premium amount was paid, but the same day that the insurance renewal was due.

If that month passes and the insured still does not pay the policy, the Insurance coverage is suspended. Even so, the policyholder would have five more months to pay the receipt and recover their Insurance. Although if the insurer does not claim payment within six months after maturity, it will be understood that the contract is terminated.

In case of suffering a claim in this month of grace, with the policy on hold and the payment of the premium not paid, the Insurance must take charge of the claim. During this time, it is assumed that the coverage of the policy is maintained and that is why the insurer assumes the coverage. Of course, as long as the Insurance is paid within the month following the expiration of the policy.

On the other hand, it is worth noting here a recent judgment of the Supreme Court regarding a traffic accident that had an insured vehicle for which, due to a problem with the collection of the Insurance, the amount of the annual premium had not yet been disbursed.

The judgment rules against the insurer and establishes as a doctrine that, “so that the insurance company is released from the obligation to indemnify the injured party in the compulsory insurance contract for civil liability in the circulation of motor vehicles for non-payment of the first Premium or single premium due to the policyholder’s fault, it is necessary to prove that they have sent the insurance policyholder a certified mail with acknowledgment of receipt or by any other means admitted by law that allows proof of receipt, by which the resolution of the contract”.

In other words, even if a client does not pay the Car Insurance premium, the insurer is obliged to cover the insured’s civil liability until they have communicated the resolution of the contract in a reliable and verifiable manner (ordinary mail or email does not comply these requirements).

However, another thing is the guarantees that exceed compulsory civil liability coverage. In that case, the insurer would not have to take care of anything, unless it is a renewal and the grace period has not expired.

Until now we have talked about problems to pay the premium or situations in which the client does not intend to leave the Car Insurance unpaid. But the idea still persists that, in order to cancel Car Insurance, it is enough not to pay. And the truth is that a non-payment of the Insurance does not imply its cancellation and can bring us problems.

As we tell you in this post about how to cancel Car Insurance , the correct thing is to communicate to our insurer our intention not to renew the Insurance, at least one month before the expiration of the policy. If this is not done, and we choose to return the receipts, the Insurance company has the right to demand payment of the policy through the executive channel.

However, the insurer usually chooses to cancel the Insurance after the grace month. Among other things, because the obligation to take on civil liability by the insurer will not end until the termination of the contract has been notified to the client.

Doing things well avoids problems. And in the case of the renewal of Car Insurance, it always helps to have your online insurance broker close to advise you in cases like these.

If what you want is to change your Car Insurance for a cheaper one or with better coverage, we can also help you find the protection you need for the vehicle.

Behind our online insurance comparator, there is a team of experts who daily compare the best offers on the market to offer a policy tailored to each client, at the best price. You just have to fill out a form and, very soon, you will start saving.

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Auto Insurance

What does Third Party Car Insurance cover? Compulsory Civil Liability

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When insuring a car, Third Party Insurance is the cheapest option. It is a basic Insurance, which includes the Compulsory Civil Liability coverage required by law in order to circulate. Although every time we find offers of policies to Third Parties with more guarantees and incorporated services. So today we are going to really see what Third Party Insurance for cars covers .

Mandatory Insurance is normally associated with this type of car policy. However, insurers have long offered basic insurance that is cheaper , but that includes more benefits to attract their clients. The idea is to attract customers with these offers who do not want or cannot spend more money to insure their vehicle.

Although Third Party Insurance is not, in essence, a compulsory Civil Liability Insurance for automobiles that will respond in the event of an accident involving a third driver, for damages caused to this, in the event that the accident was caused by the driver of the insured car.

The Compulsory Insurance covers the Civil Liability of the driver and the owner of the car (even if they are not the same person) for the damages caused to third parties in a traffic accident that has been caused by the insured.

When we talk about Third Party Damage , we mean:

Damages produced in other vehicles (such as dents and damage caused to other cars), damage to the property of other people (damage to walls, lampposts, street furniture, etc.) and wounds or injuries to animals run over.

It covers all kinds of injuries caused to other people involved in the accident, be they pedestrians, occupants of another vehicle or passengers of the insured car, with the exception of the driver.

It is important to highlight that the compulsory RC Insurance only covers the damages caused to the victims and that in no case will it compensate the person responsible for the accident for the own damages that may be suffered, either in their vehicle or in their own person.

For this reason, and to complement the Third Party Insurance, it is advisable to incorporate Driver Insurance in the policy, which at least offers coverage to the person behind the wheel of the car, regardless of their responsibility in the accident. If you are interested, we will tell you how Driver’s Insurance works in cars .

If what we want is to protect the damages that the vehicle may suffer, then it would be necessary to level up (and also the price) and subscribe an own damage policy . Here you have more information about this Comprehensive Insurance .

The Third Party Insurance Liability coverage offers quite a wide coverage. Our insurer will be responsible for paying compensation for material and personal damages caused by the insured in a claim, but up to a limit set by law.

Currently, the maximum amount of coverage varies depending on the damage caused:

In the case of coverage for personal injury and death compensation, the maximum amount per claim, regardless of the number of victims, is 70 million euros.

The coverage for damages to other vehicles and goods is covered up to a maximum of 15 million euros of compensation.

It is important to know the limits of the compensation, because if the amount contributed by the insurer was not enough to cover the civil liability of the driver.

That is, if you do not have Voluntary Civil Liability Insurance , a complement to the Mandatory Insurance that includes practically all the main insurers. If you did not know it, this post on  RC Voluntary Insurance can be useful for you.

In addition to establishing limits on compensation, in Third Party Insurance there are various cases that are not covered by this policy.

For example, there are cases in which Compulsory Civil Liability Insurance does not cover damages to third parties when those affected are close relatives or personal objects of the insured and his family.

In addition, damages to the spouse’s car or property corresponding to the Policyholder, Driver and Owner listed in the policy would not be covered when they are different persons.

Other exclusions from Third Party Insurance have more to do with the circumstances surrounding the claim. In this way, accidents that have occurred as a result of the consumption of narcotic drugs or the alcohol rate is exceeded are excluded from coverage.

If the car has been stolen and the thief causes an accident, the insurer would respond, but would repeat against the driver for the damage caused in the accident.

As you can see, there are several cases in which the Mandatory Car Insurance does not cover. If you want to go deeper into the subject, this post on what Third Party Insurance does not cover will be very interesting.

When insuring the vehicle, there are many factors that influence the choice of the ideal policy. But it is possible to establish a profile of the driver interested in purchasing basic insurance for your car .

The Automobile Insurance Third Party is often hire vehicles that already have a few years and does not deserve the punishment include guarantees covering the loss of the car, because its market value has shrunk over the years.

They are also used in those cases in which the user wants to pay as little as possible in the Insurance and prefers a cheaper policy, although their coverage is very basic.

 

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Auto Insurance

What valuation of the vehicle do insurers after a total loss

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If we look at the automobile policy, we can verify that many of the covers included refer to the market value of the car or to the new value . At other times, we talk about replacement or market value. Do you know how your insurer is going to value the car in a total loss ? The answer is described in the policy, but it will help you to know what the Insurance takes into account when evaluating the vehicle after an accident.

Who more and who less has a special affection for their car, either because it is our preferred means of transport, because it makes our work easier and represents the best ally of family leisure. Every driver knows better than anyone the value that their car has for him, but we may not have noticed how Insurance values ​​our car . And it is important.

When you buy a vehicle it is easy to give a number. You have as a best reference the price you have paid for your car to the dealer, although that value lasts for a very short time. In fact, at the same dealership a new car can lose 10% of its value or more just because it is registered and becomes a kilometer zero.

In addition, the passage of time and use undermine the valuation of a vehicle significantly. So the price of new cars is very different from used, pre-owned or second-hand cars.

Car insurers also take this depreciation into account when valuing a wrecked car. In the coverage for loss of the vehicle or for Own Damages, the valuation of the vehicle is key when determining whether, in order to comply with the contracted coverage, the repair of the car or compensation that compensates the loss of the vehicle.

This is because a clause may be included in the Insurance condition that enables the company to declare the car totally sinister if the cost of the repair exceeds the value it gives to the vehicle.

In the event that the damaged vehicle is not the culprit of the accident, things change, since when the culprit is the opposite vehicle, the other party has the right to demand that their car be repaired.

Be that as it may, if unfortunately an accident leaves the car for scrapping or suffers a devastating fire or it is stolen from us and does not appear, then the user is affected by the way the car is valued by his insurer. That is why it is so important to know the valuation of the vehicle that the Insurance can make us.

In general, the value that the insurer gives to a car after a total loss is calculated based mainly on the age of the vehicle at the time of the accident.

The details of the valuation of the vehicle in an accident are established in the conditions of the contract, although insurers generally apply the following valuations to the car, depending on the circumstances:

  • The value to new
  • Venal value
  • The replacement or market value
  • The improved venal value

When the  Auto Insurance applies the value to new in the calculation of compensation after a total loss , it is valuing the vehicle for an amount equal to the cost of a new car with the same characteristics and including all taxes (VAT and registration).

In addition, if we have declared in the policy the accessories of the car that are not standard or these are included in the policy, they will also be included in the compensation in case of loss of the vehicle.

If the car in question is no longer manufactured, the Insurance must indemnify the amount corresponding to the equivalent model that replaces it. In addition, this payment can be made in money or with a new car.

The insurer applies the venal value to a car that is totally sinister in an accident, when it occurs after a period of time from its registration that is established in the policy.

When valuing the car at the market value , the Insurance applies the sale value of a vehicle with the same characteristics and age, at the time of the loss. We talk about model and year, regardless of other aspects such as mileage or vehicle maintenance.

In this case, non-standard accessories are also included if they were described in the policy. There is also an improved market value, in which some insurers increase the market value of the car by a percentage of their compensation.

In order to calculate the venal value of the car , it is normal for the insurance company to take as a reference tables that are published each year in the BOE with the valuation of hundreds of more or less old car models. These tables show the value in euros of the vehicles, according to cylinder capacity, year, horsepower, etc.

In this case, the purchase price of a car with the same characteristics and age as the damaged car is applied. As in the venal value, it does not matter the kilometers that you have or if the car is more or less careful, and non-standard accessories can be included if they are included in the policy.

 

 

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Auto Insurance

How to cancel Auto Insurance correctly

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Disregarding Auto Insurance is becoming more common. There are cancellations that are motivated by the loss or sale of the vehicle, but most of the times it responds to a change of insurer. It is an upward trend, especially when we are looking for a better service or better prices to save when contracting a new policy. However, it is important to cancel the Insurance properly to avoid problems.

Many people think that to cancel the policy it is enough to stop paying the receipt of the Insurance, but it is a mistake. The truth is that unsubscribing from Auto Insurance can be more complicated than expected if we don’t do things right.

Devolving the receipt of the Insurance without informing the insurance company is not the way to cancel the policy. In addition, it can be expensive because the insurer of the car with which we no longer want to continue can claim the full amount of the policy by not having communicated in time and form our intention not to renew the Insurance.

To avoid these situations, today we are going to analyze how to cancel a car policy . For this, we will not go into the motivations that can lead us to change Insurance , although we will analyze the reasons why it is necessary to cancel the Insurance in an appropriate way. In this sense, it is essential to understand how the renewal of Auto Insurance works and its validity.

The renewal of Auto Insurance

When insuring a vehicle, we sign a contract by which the insurer agrees to provide the coverages detailed in the policy for a period of time, which is usually one year, renewable.

The Insurance Contract Law 50/1980 determines that the policy must include the duration of the contract and that its renewal will occur automatically on the expiration date, in terms not exceeding one year.

Generally, the validity of the Auto Insurance is annual and is extended every year, without the need for the client or the insurer to notify of this renewal.

It is important to note that, if it is annual, when paying the premium, the Auto Insurance coverage is contracted for the whole year. Although most insurers offer the possibility of paying the premium in several installments, the Insurance’s payment facilities do not affect the duration of the contract : coverage is signed throughout the year, even if the premium is paid by quarters or semesters.

This question is relevant, since the expiration date of the Insurance is the one that appears in the policy. And not the next premium payment. That is why it is important not to confuse the expiration date of the Insurance with that of deferred payments.

It is the expiration date that we must take into account when canceling the Insurance, when requesting the non-renewal of the policy.

Cancel Auto Insurance, step by step

If a client wishes to cancel Auto Insurance, the easiest way to do so is by requesting non-renewal of the policy. However, you do not have to wait for the end of contract date to do it, but you must notify it before. Specifically, one month before the expiration date.

When should you notify the non-renewal of Auto Insurance?

Until 2016, the Law required the policyholder of a Car to notify him of his decision not to renew the policy two months before expiration. This term is the same as that required by the insurer to report any change in the policy.

However, it was excessive for users to have to notify the cancellation as soon as possible. Finally, the rule changed and as of January 1, 2016, it is no longer necessary to communicate the non-renewal of the Insurance so far in advance.

With the regulatory change, the term to notify our insurer that we do not want to continue with them was reduced to one month, so that the policy can be canceled.

Thus, in order to cancel Auto Insurance, it is necessary to notify the company at least 30 days before the expiration date of the policy. Thus, you can change the Insurance of your Car without further problems.

By the way, the insurer can also refuse to extend this contract, although in his case he has to notify his client with two months of margin.

In this way, article 22 of the Insurance Contract Law, which is the one that regulates the terms of these communications, establishes that “the parties may oppose the extension of the contract by means of a written notification to the other party, made within a period of at least one month in advance of the end of the current insurance period when the person who opposes the extension is the policyholder, and two months when he is the insurer ”.

Once the non-renewal of the policy has been communicated within the period established by the Law, the other party may not object.

 

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