Unpleasant surprises at claim time most often hit car owners with a voluntary KASKO policy (comprehensive car insurance), especially those who bought the car on credit. The reason is almost always the same: the contract terms were not read before signing. Let us look at where the pitfalls lie.

The key document is the insurance rules

The policy is just a brief summary. The detailed terms — what counts as an insured event, what the exclusions are, how damage is calculated, when the payment is made — are set out in the insurance rules, a document dozens of pages long.

Under Article 943 of the Civil Code, the terms of the rules are binding on the policyholder if the contract expressly refers to them and the rules are set out in the same document as the contract, on its reverse side, or attached to it. Delivery of the rules is confirmed by an entry in the contract. By signing the phrase “I have read and received the insurance rules”, you accept all their terms — even if you have never actually seen them.

Takeaway: ask for the rules before signing and check which version applies. The parties may agree to amend or exclude individual provisions of the rules — such terms are recorded in the contract itself and take precedence.

Deductible

A deductible (franchise) is the part of a loss that the insurer does not reimburse. The main types:

  • unconditional — deducted from every payout. Example: a deductible of 30,000 rubles and damage of 200,000 rubles mean a payout of 170,000 rubles; with damage of 25,000 rubles there is no payout;
  • conditional — if the damage is below the deductible, the insurer pays nothing; if it is above, the insurer pays in full;
  • dynamic — changes depending on the number of the claim, for example the first loss is paid in full and the deductible applies from the second one.

A deductible lowers the policy price and suits careful drivers who are ready to pay for minor repairs themselves. Note how it is set — in rubles or as a percentage of the sum insured: 2% of 3,000,000 rubles is already 60,000 rubles.

Underinsurance and proportional payout

Trying to save money by declaring a car value below the real one is costly. Under Article 949 of the Civil Code, if the sum insured is lower than the insured value of the property, the insurer reimburses the loss in proportion to the ratio of the sum insured to the insured value, unless the contract provides otherwise.

Example: a car is worth 2,000,000 rubles but insured for 1,500,000 rubles (75%). With damage of 400,000 rubles, the proportional payout will be 300,000 rubles. Check whether the contract includes a no-proportion payout condition — many insurers offer it.

Aggregate and non-aggregate sum insured

  • Non-aggregate — the sum does not decrease after payouts; each new loss is covered up to the full sum insured.
  • Aggregate — the limit decreases after each payout. After a major repair in mid-year, the remaining amount may not be enough to cover theft or a total loss.

Beneficiary

The beneficiary is the person who receives the insurance payout (Article 930 of the Civil Code). If the car was bought on credit, the bank is usually named as the beneficiary for theft and total loss. The payout then goes towards repaying the loan, and the owner gets the balance, if any. For partial damage, a referral for repairs is usually issued. Check this in the contract in advance.

Exclusions and policyholder obligations

Claims are refused most often not because of insurer “tricks” but because the contract terms were breached. Check:

  • who is allowed to drive and with what driving experience;
  • requirements for anti-theft systems and for keeping keys and documents;
  • deadlines for reporting an incident and the list of documents;
  • exclusions: driving under the influence, taking part in competitions, using the car as a taxi without noting it in the contract, etc.;
  • the form of indemnity: repair at a service station chosen by the insurer, at an official dealer, or cash based on a cost estimate.

Wear and tear and “total loss”

Find out whether wear and tear of parts is deducted from cash payouts and at what percentage of damage the car is declared a constructive total loss. These terms determine the final amount after a serious accident.

Cooling-off period

If you have bought a policy and changed your mind, under Bank of Russia Directive No. 3854-U you can cancel voluntary insurance within 14 calendar days and get the premium back — in full or minus the portion for the days the contract was in force, provided there were no insured events during that time.

The KASKO calculator and the insurance company directory will help you compare KASKO terms from different companies. What to do if the insurer still refuses is covered in the “Insured Event” section.