Ever since Dr. Truman J. Martin signed the world’s first car insurance policy in 1898, this type of coverage has constantly evolved, reinventing itself and adapting to the peculiarities of each era, of each country and, of course, of each driver.
Voluntary insurance vs compulsory insurance
In Spain it was not until the 1970s that the law established the difference between voluntary insurance and compulsory insurance and made it mandatory for every car on the road to have a minimum insurance coverage.
Thanks to this compulsory insurance, also known as third party insurance, companies cover the damages that the driver may cause to other third parties and their property with his or her car. There is the possibility of extending this basic insurance to cover other types of damage such as broken windows, theft, vehicle fire, or even roadside assistance.
But this third party insurance did not cover the driver’s own material or personal damages. That is why comprehensive insurance was born. This formula not only protects you against the damages you may cause with your vehicle to third parties, but also covers the damage caused to your own car or the injuries you may sustain in an accident. Obviously, this increased coverage raised the price of the premium.
The “excess” formula
Once again, the sector was looking for imaginative formulas to allows the general public to benefit from this option, and came up with the excess. Through this system, an amount is established in the contract up to which the repair or assistance costs are met by the insured party, and above that amount by the insurance company . In return, the premium is much lower.
Another great evolution in car insurance that has become popular in recent years is known as “usage-based insurance”. In this case, the premium is adjusted to the kilometers covered or the period of time the vehicle is used. In this way, insurers personalize their services much more, adapting their products to the actual use of drivers.
As you can see, car insurance continues to evolve to respond to the needs of each driver. Either way, remember that in all types of insurance you can always expand the coverage to protect the aspects that interest you most: roadside assistance, legal defense, management of fines, replacement vehicle… it could be said that there are as many options as there are driver profiles. Find out more and adapt your car insurance to what you really need.