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In Switzerland, you have to insure your car. But, the system is quite complicated, with many options. And the insurance dealers will not make car insurance easy for you.
There are several different levels of insurance for your car. And only one level is mandatory. And there are even some options that are useless. But insurance dealers will always try to make you take as many options as possible.
In this article, I am going to cover the details of the car insurance system in Switzerland. We are going to see the different levels of insurance and which one you should use. By the end of this article, you will know exactly what you need to pay for your car insurance.
And hopefully, you will be able to reduce your car insurance bills!
Car Insurance in Switzerland
In Switzerland, there are many kinds of car insurance. They are organized in three levels, each increasing the coverage by the insurance:
- Liability Insurance (RC)
- Partial Casco Insurance
- Collision Insurance
From these three car insurance levels, only liability insurance is mandatory. Each car should have liability insurance in Switzerland. The other levels are optional. But it often makes sense to add some coverage, as we will see in this article.
There is an exception. If you use leasing for your car (you should not!), collision insurance will be mandatory. It is another disadvantage of leasing your vehicle.
On top of that, there exists plenty of options that you can add to your coverage. And each of these three primary levels has different deductibles and coverage as well.
Contrary to health insurance, you have to get all the coverage levels at the same insurance providers. So you need to look at your car insurance as a whole, not as several parts.
I am going to consider that you have a car with Swiss license plates. If you have a car with foreign license plates, you do not need Swiss car insurance. But it is mandatory for every vehicle registered in Switzerland.
Liability Insurance, or Civil Responsibility, is mandatory for each car owner in Switzerland.
This insurance will cover the damage done to others. For instance, if you bump into another car, the other vehicle’s damage will be covered by liability insurance. The same thing occurs if you injure someone. The insurance will cover the medical costs of the person and their recovery.
This insurance will generally cover a substantial amount of money. In my case, it will cover up to 100 million CHF of damage. Since the law sets this insurance, each insurance will cover almost the same things.
One thing where the insurance can differ is in the deductible. Generally, the deductible is 1000 CHF for drivers below 25. And the deductible is 500 CHF for drivers that got their driving license in the last two years. And most insurances have zero deductible for other cases. Now, some insurances have 500 CHF or even 1000 CHF deductible as a base.
Unless you think you will have many accidents, you should take the cheapest liability insurance. Even if you have a deductible, it is better to take more affordable insurance. You are not going to use it often (I hope!).
Partial Casco Insurance
Partial Casco Insurance is optional for every car unless you are leasing your vehicle.
It covers you against many risks:
- Natural damages: hailstorms, landslides, floods…
- Collision with animals
- Damage to your windows
- Damage caused by marten
- Theft of your vehicle
- Acts of vandalism
- Personal effects: If they are stolen or damaged inside your car
The exact conditions of coverage will depend on each insurance. And each insurance will apply a different deductible to each category.
If your car is recent, it is generally a good idea to get this coverage. If you were thinking of using the full coverage (adding Collision Insurance), you would need Partial Casco coverage too.
If your car is older, it will highly depend on where you are parking your vehicle. If you are always parking your car outside, it may be good to keep this insurance.
For instance, we have hailstorms every other year here. And my car is always parked outside. And we have marten as well. So, I am keeping this coverage for my car. Once my car will not be worth anything, I will drop this coverage. If I get a garage next year, I may stop this insurance. But it also depends on where you work. My car is parked half the day at my company. And I do not have a garage, only outside parking.
When you are comparing different partial casco, you need to look at the price and the deductible. Sometimes, it can also be good to read the conditions of the insurance. Some insurances do not cover some incidents in some special conditions.
The last level of car insurance is collision insurance. If you get partial casco insurance and collision, this is sometimes called full casco insurance.
This car insurance will cover you if you are in a collision with your car. It will cover the damage to your car. This insurance is only if you are the cause of the accident. If you are not the cause, the liability insurance of the other driver will cover you.
Collision insurance is also optional unless you lease your car. But, it is a recommended option if your car is recent or if it is of value. The general advice is to keep this for the first five years. You may want to keep it longer if you have a car of high value.
I am driving cheap cars. So for me, after four or five years, there is no point in keeping collision insurance. If I were driving a vehicle with much more value, I would keep it longer.
Now, there are some exceptions. If you are a worse-than-average driver for your car, you are better off keeping this insurance for a long time.
Keep in mind that if the repair costs are higher than the car value, the insurance could decide not to repair it. You will get the car’s value (minus the deductible), and then it is up to you to either repair the old car or buy a new one.
Welcome to the big scam car insurance! The occupants insurance will cover accidents for the people that are traveling in your car. If there is an accident, this insurance will also cover damage to them.
This insurance is sometimes called passenger insurance, as well. These two are the same thing.
It sounds good. But it is a big trap. In Switzerland, accident insurance is mandatory. So every Swiss people is already insured against an accident. And people with a Schengen visa in Switzerland are also required to have accident insurance. So for the vast majority of people in Switzerland, the occupants insurance is useless!
The only reason to get this insurance is if you regularly have people in your car that are not insured. This means they are not living in Switzerland, do not have a Schengen visa, and do not have mandatory accident insurance where they live.
If you are not in this case, like most people in Switzerland, you should not take out occupants insurance. And if you already have one, cancel it and talk to the person that recommended it to you!
Each insurance provider uses a bonus system for their car insurance policies.
The bonus generally starts at 100%. It means you will pay 100% of your insurance. The way the bonus goes up and down is different for each insurance. But the underlying logic remains the same.
When you have no accident or do not use your insurance for a full year, your bonus goes down. The bonus is generally going down 5% at a time. But it could go down 10% at a time.
And once you have an accident, your bonus will go up, generally by 10%. The bonus can go higher than 100%. Some insurances have an option called Bonus Protection. If you take this option, your bonus will only go up after the second incident each year. You are allowed one incident each year with this option.
Something essential is that the minimum bonus is also different from one insurance to another. Some insurances have a minimum of 30% and others of 40%.
When you compare insurance, you need to compare the actual amount you will pay, not the total at 100%. Most insurance will show you the total amount, not the bonus-adjusted amount. Since insurances do not have the same minimum, you should never compare the full amount.
When you take on new insurance, you need to make sure you will start with a low bonus! Unless you are a new driver, there is no reason to start with 100%. Generally, you can continue with the same bonus level you have now.
How can you pay less for your car insurance?
With all that we learned, we can do a few things to pay less for car insurance.
1. Do not hesitate to change car insurance
Many people do not want to switch car insurance. It is a mistake.
If you can change your car or simply your coverage, it is good to compare other offers. Even if your car insurance was the cheapest when you started it, it might not be the case anymore.
You need to make sure that the delay is correct. Some car insurance policies have a five-year duration. It is pretty bad, unfortunately. You can still make changes to your insurance during that duration, but you cannot change your provider.
2. Reconsider your coverage
As a car gets older, you can reconsider your coverage. On a 10-year-old car, you do not need collision coverage. And you probably do not even need partial casco coverage.
It is essential to re-evaluate your needs every year for your car. For instance, after five years with my car, I have removed the collision insurance coverage. And one year after that, I removed the partial casco coverage as well.
3. Pay only once a year
Most car insurance providers will offer you a reduction if you pay once a year only.
Generally, you can choose to pay your car insurance every quarter, every semester, or once a year. But the more often you pay it, the more money you will waste — for instance, my insurance bills 15 CHF for paying twice a year instead of once.
If this is too much money for you to pay at once, you should improve your budget to have enough space for big bills. Everybody should be able to pay for this at once.
Since it is not a considerable amount of money, you should not be worried about opportunity costs.
4. Lower your bonus
An obvious way to lower your bill is to reduce your bonus level. But, it is not always easy or even possible.
If your bonus is already the minimum, there is nothing you can do, unfortunately.
If you do not have the minimum, the way to lower it is to drive one year without an accident. It should not be too complicated if you are driving carefully and without distractions.
If you are young, there is one way to lower your bonus. You can let your parents declare the car in their name. That way, the insurance will use their bonus level for the bill. Now, there are some issues with this. First, if you have an accident, you will increase the bonus level of your parents. Second, once you want your car insurance, your bonus will be higher than if you started directly with a car in your name. I do not like this technique.
You need to know that you do not need to start new insurance with a 100% bonus. You can discuss with your insurance dealers to start with a lower bonus directly.
And if you are not the best driver in the world, the bonus protection option is a great addition. It is cheap to subscribe to. And it can save you a lot of money if you do not have more than one incident per year.
5. Increase your deductible
With a higher deductible, you will pay less each year for your car insurance.
If you do not use your insurance often, it could be useful for your budget to reduce the deductibles in your insurance policy.
Of course, if you increase your deductible, you need to be prepared for this expense. You need to take this into account when you decide on your emergency fund.
6. Put your license plates on hold
There is one good thing about the car insurance system in Switzerland. If you are not going to drive your car for a while, you can put your license plates on hold.
For the duration when the license plates are on hold, you are not required to pay liability insurance. It means that your insurance will have to reimburse you the amount for the months without your license plates.
Now, not all insurance providers are equal. Some will reimburse the entire insurance premiums will some will only reimburse a portion of it. But this remains an interesting technique.
7. Change car
How much you pay for your insurance will depend heavily on your car.
First of all, they will take the value of your car into account. The more valuable your vehicle is, the more you are going to pay. It makes sense since you are insuring something that is of higher value.
And second, the more powerful the engine of your car, the higher your premium will be. This has to do with the environment and the incident risk.
The base price of the car is important. But the age of the vehicle is even more critical. Depreciation will be taken into account when calculating the premiums for your car.
Given these facts, you should avoid getting a car with a lot of value. If you get a cheap car or a good second-hand car, you will pay less for your car insurance.
8. Choose an environment-friendly car
Some insurance providers will offer you a discount for some highly-economical cars.
Within this category, I mean hybrid cars and electric cars. But some companies are also offering discounts on cars with low consumption or low gas emissions.
You can save a substantial amount of money by taking such a car. For instance, Helvetia is discounting its premiums by 25% for electric cars. And you are also going to help a little in the fight against global warming.
Which car insurance should you choose?
Choosing a car insurance policy is not an easy task. The best insurance will depend on each situation. I cannot tell you which insurance is the best for your case.
First, you will have to decide which level of insurance you want to take for your car. For instance, you may choose to go with only liability insurance if you have an old car. Or you may choose to go with the full coverage if you just got a new car.
Then, once you have decided on the options you want, it is time to compare the different offers that are available to you. There are many insurance providers in Switzerland. And there is not one that is the best for every situation.
For me, the best insurance is the cheapest one for my situation. But there are a few more things I will take into account when I compare different policies:
- The starting bonus. Since I have been driving for more than ten years, I expect to directly start at the minimum bonus.
- The deductibles of the different levels. Given the same price, I would rather have lower deductibles. But if possible, I could choose to increase my deductibles to get a lower price.
- The limits of coverage. Some insurances are pretty limited in what they cover. For instance, some insurances will directly cover you if you drive abroad. If I have a problem, I want to be sure to be covered.
Car insurance comparators
Given the massive choice of car insurance providers in Switzerland, it is better to use a comparator to find the best one.
Unfortunately, there are fewer great comparators for car insurance. It is a bit sad since the comparators for health insurance are very good. But for car insurance, this is not the case.
The best car insurance comparator, in my opinion, is the comparator from bonus.ch. They have a great choice of insurances. And their interface is pretty good. You will have to enter plenty of data before you can get an offer. But that is the case of every comparator.
The second car insurance comparator that you should check out is the comparator from comparis. Usually, I like comparators from comparis. But I am not a fan of this one. For the simple reason that they do not show the names of the insurance directly. You have to click on each product, one by one, to get the real results. It is simply a bad design. But it also gets the job done.
So, first, you should try the comparator from bonus.ch. And if you do not like it, you should use the comparis. Of course, you can also use both to validate the results.
If you want, you can also go through an insurance broker. There are some good ones. Be careful that they may not offer you the best offer. Generally, they only work with a subset of insurance. It means that they may not work with the cheapest ones available for your situation. And they are likely to try to get you extra insurance that you do not need.
The car insurance system in Switzerland is quite complicated. But, it is not as complicated as the health insurance system.
You need to make sure you do not take too much coverage. Most insurance will try to make you take as much coverage as possible, regardless of your situation. But in a lot of cases, you do not need full coverage. And you will likely never need occupants insurance.
And I feel like the prices for car insurance in Switzerland are fair. They are not cheap (nothing is cheap here). But they are affordable. And you have several choices you can make in what you can want to get covered or not.
And before you ask the question, I am currently with Helvetia for my car. My car is about eight years old. I only kept the liability insurance on this car. At this point, my car is not worth much.
To learn more about insurance in Switzerland, you should also read about Health Insurance in Switzerland.
What about you? Which car insurance do you have? And what insurance have you taken for your car?