Pan or total. Why pay extra for the current CASCO

In March-April, many CASCO owners began to receive calls and messages from their insurance companies with such offers. Companies offer to increase the amount of insurance coverage and pay extra for an existing policy. Insurancevlog explains why insurance companies need it, why this option is beneficial for the client, and how to expand the amount of compensation in situations where the insurance company does not want to do this.

Why do insurance companies ask you to pay extra for a valid policy

One could say that insurance companies are worried about their customers, but let’s be honest: first of all, companies are worried about themselves. After many major car brands left Russia, prices for both new cars and original auto parts have risen sharply. In some segments , the cost of parts has doubled . At the same time, the prices for repairs obviously increased, which made insurance companies think about how to reduce potentially impressive costs and at the same time not lose in the quality of services.

One of the best options to maintain the status quo in the current situation is to expand coverage according to the new market value of the insured car. And this is the rare case when the interests of companies and their clients completely coincide (or almost coincide). When calculating, most insurance companies take into account not only the amount of the updated sum insured , but also the remaining term of the policy. Most often, the surcharge ranges from 20 to 30% of the original price of the CASCO policy. As a result, the company receives additional financial injections, and the client receives guarantees of protection against possible losses.

What happens if you do not update the terms of insurance

In fact, in case of minor damage, the owner, who insured the car under CASCO and did not change the terms of the contract, is in a serious win. Given the rise in price of spare parts, he receives repairs for twice the amount (albeit in the same, in fact, volume) without any overpayments. And this can be an argument for careful drivers and those who rarely travel to the city. However, it should be understood that in the new realities, in case of serious damage, the insurer, after an independent examination, may recognize the car as unrepairable .

The figures for insurance companies vary, but on average, for the “total” it is necessary that the repair be valued at two-thirds of the entire sum insured . In this case, the client must return the full cost of the insured car ( excluding depreciation and deductible, if any ) in cash . The same applies to theft – if the car is stolen, the insurance company compensates for the damage in financial terms.

This is where the main problem lies, because the reimbursement will be made according to the old “price tag”. And what the client can then buy for this amount is a big question.

Mafin Media talked to one of the car owners who has already encountered a similar problem. Evgeniy got into an accident a few months ago in his Hyundai Sonata ( the name and brand of the car were changed at the request of the hero ). The culprit was found to be another participant in the accident. Evgeny’s car was insured under CASCO, so he turned to his company to repair the car. However, the insurance company refused to restore the car , answering that the estimated cost of repairs exceeds 75% of the sum insured, therefore, the car is considered “dead”.

Eugene did not agree with such a proposal and now intends to defend his interests in court. At the same time, if it is not possible to agree on the amount with the insurance company, the car owner is going to recover the due compensation already from the culprit of the accident.

How to expand the sum insured for CASCO

The client has only two possible ways to increase the amount of insurance coverage:

  • Pay extra and conclude an additional agreement to the old contract.
  • Sign a new contract.

Some insurance companies, as we mentioned at the beginning of the article, have already started calling customers and offering them to update the terms of the contract. Another part is ready to review and expand the amount of coverage when applying. But you need to be prepared that the insurance may not make such changes . In such a situation, it is up to the insured whether to break the old contract and conclude a new one or not.

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