What is the difference between buying car insurance overseas?

What is the difference between buying car insurance overseas?

Difference between buying car insurance overseas

It has been more than 10 years since China became the “world’s largest new car market”. At the same time, China’s auto insurance market has grown in size and has grown into the world’s second-largest auto insurance market after the United States.

However, compared with the developed and mature auto insurance markets in Europe and the United States, it will be found that the auto insurance business of Chinese insurance companies has always been in a market predicament of “large scale but difficult to make profits”, that is, the so-called auto insurance market. “Red Sea Competition”. In terms of the cause of its “Red Sea”, compared with the overall environment and substantive mechanism of the mature overseas auto insurance market, it should be said that the difference with my country is quite obvious.

“Strongly associated” with the place of registration, Germany is a world-recognized “kingdom of high-quality cars”, and “BBA” is world-renowned, with 62 out of every 100 Germans owning a car. For a long time, Germany has established a fairly complete system around car management, and car insurance is an important part of it.

According to the author’s understanding, from the perspective of categories, German auto insurance mainly includes two categories: “liability insurance” and “accident insurance”. Such as “passenger accident insurance” for economic compensation, and “auto legal insurance” which provides financial support for the insured to resort to the law in the event of a traffic dispute. Of course, these insurance programs are all voluntary.

In the European market, people are “talking about” that there is a saying in the German car insurance fee system – “Berlin cars are one gear more expensive than Bonn cars” – this is of course a “one-liner” of the public, and from The situation described from the industry perspective is that there is a “strong correlation” between the calculation of the insurance rate for domestic cars in Germany and such important factors as the registration area. The number of cars in the registered area, traffic management, public security, the possibility of theft, and even the level of repair costs all determine the level of auto insurance premiums. For example, Berlin is the capital of Germany, with a large population, a high density of cars, and complicated traffic management. Car theft and vandalism occur from time to time. Therefore, if the same car is registered in Berlin, the insurance premium will be higher than that in Bonn. a stall. This rule has led some people who have residences in Berlin and Bonn to prefer to register their cars in Bonn. Similar to Germany, in the auto insurance rules of some states in the United States, the insurance premiums for vehicles living in large cities with heavy traffic are also much higher than those in small cities or towns.

“Grade”

In Germany and the United States, cars of different brands and types are subdivided into different insurance levels, which are used as an important basis for the approval of insurance compensation rates.

For example, in Germany, taking the Volkswagen POLO as an example, according to the evaluation of the German Automobile Industry Federation and insurance companies, the insurance level of this car is set as 10, and it only needs to pay an insurance premium of 350 euros (about 4,500 yuan) every year. In terms of marketing, cars that are similar to POLO cars are generally class 13 or 14, and they have to pay 700 euros (about 9,000 yuan). Therefore, the car brand insurance level based on this has already become an important reference index for consumers when purchasing cars abroad. To ensure the market share of the brand, major foreign car manufacturers have also regarded these issues as technical issues. Make great efforts to solve it to reduce the insurance level of your products. As far as the author knows, inspired by this, several large property insurance companies in my country have recently adopted a similar practice of treating different brands and models of vehicles differently.

Not only the cars are graded, but the drivers as well. In the UK, the driver’s experience is very important to the level of premiums. Generally speaking, for drivers with violation records within 5 years, such as drivers who have been sentenced to “dangerous driving” by the traffic management department, their insurance rates are about 20% higher than those without violation records. If there is no continuous violation record, the premium will be greatly reduced. For example, Cornhill Insurance Company of the United Kingdom stipulates that when the policyholder renews the policy, if there is no accident claim at the end of the first year, the insurance rate will be reduced by 30%, and there will be no accident claim for 2 consecutive years, and the insurance rate will be reduced by 40%. 3 years without accident claims, 50% discount, 60% discount for 4 consecutive years, and up to 65% discount for 5 consecutive years. Many people who have not had a record of breaking the law for years will only pay £200 for their premiums.

humanization, life

In Canada, a poor record of self-inflicted car accidents can also have an impact on rates. In addition, car products that are easily stolen or frequently involved in car accidents, frequent changes of insurance companies, etc. will have an impact on insurance rates. Participating in group insurance, insurance companies can generally give group insurance discounts, as for other discounts, it is almost impossible. In addition, in Canada, if you use a car for commuting to work, the premium will be significantly higher than that of a car that is only used for weekend travel. And people who live in the city will also have higher car insurance premiums than those who live in the suburbs. The risk control awareness of Canadian auto insurance can be said to be extraordinary and has been very refined.

When American insurance companies formulate auto insurance rates, in addition to taking into account the condition of the car itself, they must also take into account various factors such as drivers, regions, and climates. Auto insurance in the United States is divided into two categories: personal auto insurance and commercial auto insurance. When formulating personal auto insurance premiums, the driver’s age, gender, driving experience, violation record, smoking, marital status, and place of residence should be fully considered. and so on. It is worth mentioning that the youngest drivers among unmarried men have the highest rates if they take out personal auto insurance. The reason is that the American insurance industry believes that unmarried men lack a sense of responsibility and are more likely to cause vehicle accidents. Moreover, in the United States, if an unmarried man drives a car with bright colors such as red, his car insurance rates will also increase, because psychologists believe that single men who like these bright colors are more emotional than other types. Personalities are more prone to accidents. Unlike the United States, in Canada car insurance, married people with a family have higher vehicle rates than unmarried people.

The insurance premium for German novice is calculated at 260% of the standard rate, and then decreases year by year, the minimum can be reduced to 35% of the standard rate, of course, provided there is no accident. In the event of an accident, the premium for the second year will increase by about 50% based on the previous year. Such a policy can be described as killing two birds with one stone: it not only encourages the driver to drive safely, the driver has fewer accidents but also benefits the profit of the insurance company.

“Mandatory Three Responsibilities” Zero Profit

Compared with our country, foreign third-party liability insurance has also developed a long time ago. As early as 1956, Japan passed legislation to implement compulsory third-party liability insurance. The compulsory insurance is only limited to the third party’s injury liability for the car, excluding the third party’s property damage. The only exclusion from this compulsory insurance is the intentional act of the insured. Those who do not participate in insurance are not allowed to drive a car, otherwise, they will be sentenced to imprisonment for not more than 6 months or a fine of not more than 50,000 yen.

What is striking is that Japan implements the principle of “no loss and no profit” for third-party auto liability insurance. Japanese law stipulates that its insurance premium rate is determined by “cost pricing”, which is not allowed for for-profit purposes, and its premium rate is determined by the government. It is formulated by a designated special committee and approved by the Minister of Finance. The formulation of the rate mainly refers to the number of insured vehicles, the accident rate, and the average compensation amount per accident. To ensure that the insurance company does not lose money, it is stipulated that an additional insurance premium will be collected as a handling fee, and any additional insurance premium will be added to the owner of the fatal accident.

In the United States, third-party liability insurance for automobiles is mandatory. The limit of liability is stipulated by each state. Most states stipulate that the legal limit of personal injury is between 2,000 and 4,000 US dollars, and the property damage limit is between 5,000 and 10,000 US dollars. States in the United States adopted the negligence liability system in the early stage of implementing compulsory auto liability insurance, but during the implementation process, it was found that this system could not fully protect the economic interests of the victims. A car accident is a sudden event, and it is difficult to provide evidence. It is not easy to accurately determine the negligence between the parties. It is often necessary to solve the problem of compensation through tedious and complicated lawsuits. Given this, after 1971, most states in the United States began to implement the no-fault liability insurance system.

The most humane “customer-centric”

In the communication with the industry, the person in charge of the international business of Jiangtai Insurance Brokers told the author that after a certain summary and analysis of the above, it can be said that the auto insurance industry in mature overseas markets has something in common, that is, the auto insurance market is completely subdivided, large and small. Small auto insurance companies have their expertise and focus; the meticulous service guarantees the most humane service in the shortest possible time. Buying auto insurance can even become a once and for all thing. At the same time, under the fully competitive market environment, auto insurance companies pay great attention to the brand and word-of-mouth effect.

The first is pricing refinement. There are many variables in the rate determination in the United States, including three factors: vehicle information, vehicle owner information, and insurance information. Vehicle information includes factors such as model, vehicle age, frequency of use, and security and anti-theft configuration; vehicle owner information includes gender, age, marital status. , medical condition, and education level; insurance information includes factors such as accident records, claims records, etc. Each insurance company can design its risk assessment system, evaluate customer risks based on the collected customer information, and finally generate quotations. The more complete, true, and accurate the collected customer information, the more scientific, fair, and reasonable the pricing will be. Some industry experts told the author that the United States pays special attention to the risk factor of “carrying” + “consulting people”, and some insurance companies in mature markets even provide customized services for auto insurance, that is, customers can choose the premium they are willing to pay, and then provide corresponding insurance. Auto insurance protection to meet the deeply customized needs of different customers.

The second is the in-depth application of overseas insurance technology. A phenomenon that is embarrassing for the industry is that the Chinese auto insurance industry has had a low loss ratio for a long time, but it is still struggling to break even; while the US auto insurance market has a considerable loss ratio, there is still relatively stable profit space. Just taking the claims process as an example, the US auto insurance needs 4-5 links from reporting a case to claim settlement, while China has several more links, and the number of employees is several times that of the United States. The above-mentioned person said: “This means that the US market uses a fraction of the number of employees in the Chinese market, but it does more and more efficient work than China, not only winning profits but also giving back more benefits to consumers. This is It is caused by the difference in management level and operational efficiency, that is, the difference in the depth of the application of insurance technology behind it.”

In addition, the author also believes that there is a point of product “customization” here. Compared with China, auto insurance products in mature markets not only include core insurance such as auto damage insurance, third-party liability insurance, and theft insurance, as well as additional insurance such as glass breakage insurance, driver accident insurance, and trailer service insurance but also according to specific groups. Differentiated needs, provide a variety of value-added services such as car wash, chauffeur, road assistance, overseas travel, etc. These value-added services have been fully considered in the calculation of premiums, to meet customer needs, but also increase the income source of insurance companies.

By aamritri

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