Insurance policies have terms and conditions that we need to know about in order to understand what we pay for and what rights we have. Especially motor insurance contracts, as civil liability cover is obligatory, are more familiar to vehicle owners.
Two main clauses that we need to understand are exemption and age.
The only thing they have in common is that the greater the exemption and the greater the age, the lower the premium we pay.
But let us first see what these two terms refer to:
Exemption
Exemption is the amount that the insured (vehicle owner normally) must pay out of his own pocket when the vehicle is damaged. In other words, it is the amount of money in which the insured person participates, and the insurance company is exempt from covering. This means that if the car insurance policy mentions an exemption of €100, when a €1500 damage occurs, covered by the insurance policy, we pay the first €100 and the insurance provider pays the remaining €1400. As the amount of the exemption increases, we also pay a lower premium as the cover provider assumes a smaller part of the risk.
Vehicle Age
Vehicle age is one of the key factors in determining the commercial and insured value of our car. What’s that supposed to mean? That the older our vehicle, the lower its commercial value, and therefore the amount for which our insurance company covers us, hence a lower premium.
To avoid an unpleasant surprise, if the time to claim arrives, we must be informed of the amount of our exemption and consult with our insurer about changes in commercial value due to age every time our contract is up for renewal. According to the Consumers’ Association for quality of life “the insurance company is obliged to escalate the premiums for property damage, depending on the value of the car. Thus, premiums for property damage should decrease over time, and as long as the value of our car decreases.
Also, the insurance company should inform before renewing the insurance contract, of the value of the car it has calculated.
It should properly estimate the value of the car and if it has made a higher inaccurate valuation, then it is obliged to reimburse us the difference in the premium you have paid, with the threat of administrative penalties.
Age also plays an extremely important role in the amount of our compensation or in the amount covered in the workshop by our insurance company for property damage. Here too, a great deal of attention is needed as each insurance company might have a different policy. However, it is customary for cars of old age to be compensated with spare parts that are not new.
source
Nikos Morakis
Insurance daily news
