The advantage of comprehensive insurance on a new car – or very recent if you buy a used vehicle – is that it is more protective.
Beyond your civil liability, it covers your own material damage but also theft and attempted theft, fire, vandalism, natural disasters… Including if you are responsible for the loss. It is also necessary if a car loan is not yet fully repaid because it includes a replacement value.
Beware of loss of value
The problem with any vehicle is that it loses value year after year; its rating drops and this rating will be used to compensate you if the vehicle is destroyed.
This is the reason why all insurance companies agree that car insurance must evolve according to the age and value of the vehicle. If you own a car worth 20,000 euros with an annual premium of 1,000 €, in the event of a claim, the insurance will pay this amount as compensation in the event of total loss.
But if the car is only worth €1,000 after 10 years, you will get €1,000 compensation for a €1,000 premium; the equation is no longer correct.
The advantages of changing warranties
Switching from “all risks” to “third party” insurance allows you to save a little; it’s all about choosing well. For a car about five years old, the extended third may suffice, supplemented by theft and fire guarantees and the purchase value guarantee which guarantees you a refund up to the amount of your purchase; with the age of the car, a 0 km assistance guarantee is also a good idea.
From 7 or 8 years, your car has lost 75% of its value; the third party with theft/fire and assistance will be sufficient. After 10 years, the mandatory civil liability guarantee will be sufficient. And if your old car becomes the second car, kilometer insurance is another option.
Pay attention to expenses
If you want to change guarantees for third-party or extended third-party insurance, you must carefully assess your ability to assume certain expenses that will not be covered by third parties.
Does your savings allow you to replace a destroyed vehicle or to incur several hundreds or thousands of euros in repairs while waiting to be compensated? If the answer is no, it is probably better to keep your comprehensive insurance