Getting your leaving certificate and starting work. That’s the idea a student has, who no longer wants to continue studying. Employers, however, have their requirements regarding experience, and often look for drivers with a driving licence. So there’s nothing left to do but go to driving school and try to gain some initial driving experience. Do you know where to arrange third-party liability insurance or how to obtain it at the lowest possible price?
Is it necessary to have third-party liability insurance?
Properly arranged and paid third-party liability insurance is a basic condition for using a motor vehicle on public roads. Its purpose is to ensure compensation for damage caused by your vehicle to the property and health of other road users. It also covers assistance services and environmental damage that you may cause in an accident.
Does third-party liability insurance have limits?
The damage caused can amount to astronomical sums, and therefore the minimum amount for the limit of third-party liability insurance is set by law at a total of 35 million Czech crowns. Advisors recommend increasing it depending on the type of vehicle used and when travelling abroad.
The maximum limit is set at 250 million Czech crowns, but contracts are usually concluded with a limit of 100 million Czech crowns (100/100).
Tip: You can read more about responsible management of financial resources in the article Financial literacy: what is it and how to get started?
What factors influence the price of insurance?
A significant influence on the increase in the cost of third-party liability insurance is the change in the approach of repair shops. They often choose to replace the entire car part instead of repairing it. This is due to concerns about the safety of the vehicle after an accident. Rising prices also reflect increasing wages for car service workers.
You have the same car as your friend, and yet the amount of your insurance differs. How is this possible? One of the factors is the different approach of insurance companies in recognising bonuses, as they are based on different pricing tables.
A deciding criterion is also the age of the driver. Differences in insurance prices between a 20-year-old and a 50-year-old driver can be in the order of several thousand.
The following factors influence the amount of the third-party liability insurance premium:
- Type and make of the insured vehicle.
- Vehicle performance and year of manufacture.
- Fuel type, engine size.
- Your age and place of residence.
- Total of your driving experience calculated in months (bonuses, maluses).
- Chosen scope and limits of coverage.
- Frequency of payments, supplementary insurances.
Online insurance calculator for drivers
An online calculator is an excellent and convenient tool for at least roughly finding out the price of third-party liability insurance. What data will it require?
It is necessary to enter detailed vehicle data (vehicle type, fuel, performance, year of manufacture, vehicle price and other), policyholder data, choose a possible discount option, bonus amount and enter the insurance start date.
The system will then evaluate the situation and show you a price offer from individual insurance companies, including insurance conditions. When choosing a suitable policy, consider all conditions and benefits, not just the insurance price.
Tip: Young drivers are considered more risky and this significantly increases the price of their insurance. You may also want to read 1 tip that will finally teach you how to save →
Savings when arranging third-party liability insurance
For drivers, experience is valued, and this is reflected in the awarding of bonuses, which directly affect the price of insurance. What should young, inexperienced drivers do?
One option is to take out third-party liability insurance in the name of another family member who has years of driving experience and a sufficient bonus.
However, be aware. As an inexperienced driver, you are more likely to cause an accident. Drivers under the age of 28 are considered the most risky. If you cause an accident, it will lead to an immediate increase in all third-party liability insurance contracts for the person you are insured with.
Another way to get a discount is to take out both third-party liability and hull insurance within the same contract. It is also worth comparing the prices of different insurers using comparison websites.
The chosen frequency of payment is also worth mentioning. Some insurers offer discounts when paying for a period of one year (12 months).
An interesting option for young drivers is bonus insurance. What does this mean in practice? The insurer awards discounts for every 12 months without an accident. If you cause an accident, you lose 36 months of no-claims bonus.
A young driver has the option of insuring their bonus for 3 years. If they manage to drive without an accident for the entire period, their insurance will be cheaper in the end. Otherwise, they must pay the full amount of the insurance.
Third-party liability insurance for motorcycles
Operating a motorcycle, like a car, requires third-party liability insurance. Riding without third-party liability insurance can result in fines.
The minimum insurance limits are the same as for a car, 35 million crowns. What do you need to arrange an insurance contract?
[[1]] The easiest way is to provide the financial advisor with the vehicle registration document. From it, you can read personal details of the policyholder, the motorcycle brand, engine power and displacement, and whether the motorcycle will be used for personal or business purposes. The information about the current bonus and the number of insurance claims is also important.
[[2]] You can also easily compare offers from individual insurance companies online. To clear up any uncertainties, you can use an online advisor or visit a branch of a specific insurance company directly.
[[4]] Tip: Protect not only others, but also your property by arranging comprehensive car insurance. This will save you from considerable financial damage and gaps in your family budget. Also read A tool for getting rich: financial leverage->
Hull insurance
[[5]] Comprehensive car insurance is a product that, on the contrary, is designed to protect your vehicle and cover damage caused to you during its operation. It covers insurance against vandalism, theft, collision with wildlife, assistance services (vehicle towing, arrangement of replacement accommodation), and natural disasters (hail, floods, windstorms, fire).
However, simply taking out a comprehensive car insurance policy is not enough. It is essential to regularly check and address the technical condition of the vehicle being operated (change summer tyres for winter tyres, regularly top up oil, address the condition of brake pads, have a valid technical inspection (STK)). This will prevent unpleasant surprises when the insurance claim payment is reduced in the event of an accident.
As with third-party liability insurance, hull insurance can be taken out online. A deductible is also agreed within the contract, which affects the final price of the insurance.
[[6]] Before you arrange comprehensive car insurance, consider these areas:
- The method and frequency of vehicle use.
- The extent of driving experience.
- The car’s make and its technical condition.
- The age of the car (arrange insurance for a new car, consider for older vehicles).
- The amount of deductible.
Before taking out vehicle insurance, it is necessary to consider or consult with an insurance company’s sales representative about the correct settings for the insurance parameters. You can also cancel compulsory third-party liability insurance six weeks before its expiry date and switch to another insurer.
[[7]] If you travel abroad frequently, it is sensible to boost your assistance service coverage. Conversely, if your car is only used for basic commuting to work and shopping, a basic package is enough and there is no need to unnecessarily increase its price. The ideal is to have good coverage for the event of a collision at a reasonable price.
