3 differences between auto insurance and vehicle protection that you should know!

At first glance they may appear very similar, but the point is that there are 3 differences between auto insurance and vehicle protection that you should know.

Before hiring either of the two, you need to clear up all your doubts so that you can buy the one that best suits your needs, your lifestyle and your budget.

See below the 3 differences between auto insurance and vehicle protection

Because they look similar, some people may end up getting confused when hiring them, and this can greatly influence your life. The modes of action are very different, which, in a possible accident, will determine many things.

The management

In the case of insurance, those who manage and are responsible for providing services are insurance companies. They normally follow stricter rules regarding vehicle protection.

Vehicle protection is an association between a group of people. People sign a responsibility contract, where all members who make up the association are responsible for the cars that are part of the association. The risk of each car is divided between the members of the association, and there is no institution that regulates compensation in the event of an accident. Therefore, there is no policy on vehicle protection.

Regulation

Insurance is regulated, authorized and supervised by the CNSP – National Council of Private Insurance, by SUSEP – Superintendency of Private Insurance, in addition to the Ministry of Finance. Just like companies, insurance brokers are also supervised by these national bodies, and must comply with all imposed rules and determinations.

Vehicle protection is regulated by the OCB – Organization of Brazilian Cooperatives. There are no specific laws to regulate vehicle protection, only that citizens can form cooperatives, as long as it is for legal purposes. In this way, the operating rules of vehicle protection associations are formed by their members.

Values

The values ​​of vehicle protection and insurance tend to vary greatly from each other. Vehicle protection can be cheaper than insurance. However, the insurance determines a fixed value for the installment, while vehicle protection varies according to the accumulated losses, as all members are responsible.

With these 3 differences between auto insurance and vehicle protection, you can understand a little more about how each one works and which one best suits your preferences, so you can make a conscious choice and avoid future frustrations.