What is Auto insurance, also known as car insurance, serves as a safeguard against the potential risks that come with operating and transporting motor vehicles. Depending on the range of guarantees provided by each policy, there are many contracting modalities for motor insurance.
At the very least, it is legally required in Spain to obtain civil liability insurance. The applicable laws hold an insured party civilly accountable, and mandatory auto insurance protects them from liability for harm they cause to others.
The automobile insurance policies currently available on the market may fully or partially incorporate other additional coverages in addition to the mandatory subscription civil liability coverage, to meet current coverage demands and simplify the contracting process.
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Different kinds of Auto Insurance and one is ideal for you to select
Car insurance comes in four flavors: comprehensive, extended third-party, comprehensive with deductible, and civil liability, also known as third-party insurance. Then, there is a wide range of variations within these four modalities, with varying degrees of coverage contingent on the optional assurances, the existence and size of a deductible, and other specifics.
Auto Insurance Modalities
Obligatory Insurance
Car owners must obtain and keep up mandatory civil liability insurance. In the event of an accident, this guarantees fair compensation to the victims due to material damage to another vehicle and/or personal damage. The least expensive choice is typically compulsory insurance, but it’s also the most simplistic and offers the fewest advantages.
Mandatory insurance only covers the driver’s civil obligation to other parties; if the driver causes the accident, it does not cover damage to himself or his car. The required insurance will pay to repair damage to the other automobile or to public roadways, as well as to recompense any injured pedestrians and occupants of each vehicle. It will never pay for the driver’s injuries or repair the car of the person deemed to be at fault.
These protections would be provided through “own damage” or “comprehensive insurance” coverage, which would cover the vehicle, and “driver accident insurance,” which would cover the driver’s injuries. Depending on the coverage agreed upon, the majority of insurance firms provide third parties with two types of insurance: basic and extended.
Basic third Party Insurance
In addition to covering the driver’s civil liability, which is required by law, basic third-party insurance may also include the following guarantees, as it does with FIATC’s basic third-party insurance:
Voluntary civil liability is an addition to statutory civil liability that raises the financial thresholds established by law to ensure appropriate compensation if they fall short. As a preventative measure against a major incident that would force us to compensate third parties with substantial sums of money, it is wise to assess this coverage.
Legal defense: In the event of a traffic accident involving an insured vehicle, third-party auto insurance also pays for judicial and extrajudicial legal aid. Generally speaking, this coverage covers procedure expenses and gives you access to various legal services. These coverages may also be available with FIATC third-party insurance, depending on the type of vehicle:
This coverage provides travel assistance in the event of an accident or breakdown while traveling. Some insurers allow you to choose the repair location, while others mandate a workshop close to the accident site. We offer 24-hour service at FIATC. We usually advise renting it because of the peace of mind it offers, plus it comes with assistance coverage for flat tires and fuel shortages.
Extended Third Party Insurance
Although not full insurance, this modality extends promises. Different kinds of extended third-party insurance provide more benefits based on the requirements or preferences of the individual motorist.
With this enhanced third-party insurance, you’ll be able to better safeguard the car against any collisions. The most commonly included benefits in third-party insurance are as follows: Travel assistance, theft, window breakage or repair, and fire or explosion are among the most frequently included advantages in third-party insurance, according to FIATC.
Comprehensive Insurance
Given that it is the most comprehensive type of auto insurance, it provides the most protection against potential collisions. It covers damage to other parties as well as your own, and it naturally provides coverage against theft, fire, and broken windows.
In the event of a total loss, the insurance company will provide the specified settlement for the specific car. Similarly, in order to enhance benefits, each insurer typically provides other services that are exclusive to comprehensive insurance. You can either contract these services, like replacement vehicles, optionally or include them.
FIATC’s comprehensive insurance provides the following optional contract coverages:
Substitution Vehicle
Handyman service: expert repair and maintenance of small vehicles. Comprehensive insurance for private vehicles covers damage from collisions with game animals without any excess.
Deductible-Based Comprehensive Insurance
Comprehensive insurance with a deductible is a contracting alternative that offers the same level of protection as comprehensive insurance but at a lower cost in exchange for taking on a portion of the repair costs.
The main difference between comprehensive insurance and comprehensive insurance risk, whether with or without a deductible, is that in the former scenario, the insurer will cover the entire cost of vehicle repair in the event of an accident due to the insured party’s fault, while in the latter scenario, the insured party will bear a portion of that expense. The contracted franchise will determine the cost to assume for the repair.
Automobile Insurance Coverage
As we previously stated, coverage is the basis for auto insurance; modalities do not exist. In other words, the established modalities determine themselves by the coverage they provide. As a result, the cost of insurance (the premium) will vary depending on whether or not it provides more coverage.
We can point out that there are three primary categories of coverage, depending on the specifics:
Civil Liability Coverage: The objective of civil liability insurance is to exclusively cover third parties.
Limited Coverage: This includes everything mentioned previously, plus additional scenarios like car theft or potential glass breaking.
Extended Coverage: This type of coverage is the most comprehensive. Regardless of whether the driver or other parties initiated the collision, the coverage covers almost everything that happens to the car.
Choose the Most Appropriate Insurance
Different drivers and cars require different kinds of coverage. It’s crucial to consider the vehicle’s age, value, usage, and driver profile when selecting insurance. It is best to insure a new or high-end car at all risks, and then, over time, switch to a full-risk policy with excess.
If the car is now ten years old, you don’t need the same coverage; extended third-party insurance could be more affordable and yet provide adequate coverage against any accident. You won’t need a similar kind of policy if you use the car for work every day or just occasionally on the weekends, or if you store it in a garage or on the street.
If you frequently use your car and park it on the street, it makes sense to consider getting comprehensive insurance for the first few years.
The Insurance Compensation Consortium
The Insurance Compensation Consortium is an organization under the Spanish government’s jurisdiction. The establishment of this organization aimed to address any calamities resulting from natural disasters or poorly maintained roads. Alternatively, a situation may arise where a non-insured party bears the responsibility for any resulting damages.
A portion of every insurance transaction made in the nation goes toward funding the Insurance Compensation Consortium. Each of them is required to give the aforementioned institution a tiny upfront payment. We take all these steps to ensure we have funds to cover any losses that may arise from the previously mentioned situations.
