Popular Auto Insurance and care not to make a mistake

Did you know that there is a type of insurance that is up to 30% cheaper for cars that have a lower market value? So come and learn more and find out if it is ideal for you.

The Brazilian vehicle fleet is around 60 million, but only 17.5 million are insured, which corresponds to 30% of the fleet.

Seguro Popular's project is to expand the fleet covered by insurance by at least 10%, within 5 years.

Seguro Auto Popular was created in April 2016, but is still in its initial phase, available from a few insurers and only in the metropolitan regions of Rio de Janeiro and São Paulo.

It appeared as a cheaper insurance option for older cars and the initial proposal has already been modified until it reaches the market.

Until the beginning of this year, only two insurers are offering Seguro Auto Popular, Porto Seguro, in its Azul branch and Tokio Marine, only for some car models.

The contract value is, on average, 26% lower than traditional insurance from these companies.

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Comparison between traditional insurance and popular auto insurance

Taking Azul Seguros as a reference.

Simulation for a 30-year-old man, resident of São Paulo.

Vehicle: Gol, Fox, Palio and Fiesta.

Roof

– Traditional – Collision, fire, robbery/theft

– Popular – Collision, fire, robbery/theft

Award

– Traditional – value not disclosed

– Popular – price not disclosed, but on average 26% cheaper

Indemnity

– Traditional – up to 110% of the Fipe Table

– Popular – between 80% and 90% of the Fipe Table

Damages to Third Parties

– Traditional – from R$50 to R$500 thousand

– Popular – up to R$25 thousand

Franchise

– Traditional: reduced – 50%; normal – 100%; plus – 125%, 150%, 175% or 200%

– Popular – more expensive than normal by 50% (average)

Assistance

– Traditional – Free up to 400 km. Includes towing, steering assistance, locksmith, tire change, fuel shortage assistance, return home, accommodation, collection of the repaired vehicle.

– Popular – Free only up to 100 km, including tow truck, electrical breakdown, mechanical breakdown, fuel shortage assistance and tire change.

Payment

– Traditional – Interest-free installments in 4 installments, by debiting your account, 5 installments using your Porto card or 10% discount when paying in cash. Up to 6 installments with interest on cards from other brands.

– Popular – Only 5% discount up front. 10 fixed installments debited from your account or without discount on your Porto card. 6 times fixed on cards from other brands.

To give you an idea, at Azul Seguros the insurance value for a Volkswagen Gol would be R$ 1,816.86, in traditional insurance, considering the profile of the insured above.

In Popular Auto Insurance the value would drop to R$1,266.59, that is, 30% less.

The proportion of the discount follows what was determined by Susep – Private Insurance Superintendence.

However, it is important to note the difference in relation to compensation, third-party damages, assistance characteristics and payment method.

Seguro Popular does not serve all consumers

The Popular Insurance modality is offered with restrictions, which greatly limits the public profile that will be served.

Only some vehicle models are being accepted in this modality.

Furthermore, there is a limit on the minimum age of cars.

It is important to note that the deductible becomes, on average, 30% more expensive than that of traditional insurance, that is, the consumer starts to bear a much greater expense in the event of an accident.

This means that if you choose or need to choose popular insurance, you will need to be extra careful with collisions, because the savings on contracting will go down the drain if you hit another vehicle.

Azul Seguros only accepts cars that are 5 years old or more, with a maximum value of R$60,000.00, from a list of 40 car models, which includes the Palio, Gol, Uno, Corolla and Civic.

Tokio Marine does not make age restrictions, but the list of models it accepts is only 12 vehicles: Voyage, Fox, Gol, Corsa Sedan, Corsa, Uno, Fiesta, Palio, Ka, Clio and Sprinter.

The list of vehicles included those for which alternative parts are currently on the market.

This is because popular insurance allows workshops to use generic, new or even used parts, originating from accredited dismantlers.

Only for the repair of safety items, such as brakes, suspension, shock absorbers and tires, is it mandatory to use new parts.

The insured must be aware of this condition.

Popular insurance should not work for cars less than 3 years old, because patent law does not allow the sale of generic parts for components less than 3 years old.

So who is popular car insurance for?

For now, insurers that offer this coverage only accept vehicles that are 5 years old or more.

Although this is not a determination by the Private Insurance Superintendency (SUSEP), but rather an “agreement” between the companies, it is difficult for this characteristic to be changed by any company that enters the market.

This type of insurance was created for people who have older cars with lower values.

This portion of the population tends not to find taking out insurance to be advantageous compared to the value of the car.

Or, there are those who think that these cars do not attract thieves, for example, they think that these vehicles are immune to accidents, which is a big mistake.

Thus, with the lower value, the insurance becomes more attractive for these customers, as in addition to being more affordable, if no accident occurs during the coverage period, there is no feeling of “this expense was unnecessary”.

With this value, what the customer starts to think is “the price to be paid is worth it, since my car will be safe”.

What can also prevent this group of policyholders from adhering to traditional insurance is that many of these cars can also be rejected by traditional insurance.

This rejection happens because in older cars, original parts are more difficult to find, so it is not worth it for insurance companies to take on this responsibility.

Use of used or “generic” parts

One of the factors that increases insurance prices the most is the price of repair parts, when they are original.

The way that insurers found to make insurance cheaper was to require exclusivity for repairs at partner workshops, without the insured being able to freely choose their trusted workshop.

In these workshops, insurance companies negotiate discounts, forwarding a greater volume of insured customers.

Not all workshops are prepared to work with reconditioned or generic parts, dealerships, for example, only work with original parts.

The Susep rules that were changed refer to the authorization of the use of independently manufactured parts, or “generics”, after a request from insurers.

This occurred because there is no used parts market that can meet the increased demand.

Seguro Auto Popular's original project was to use used or pre-owned parts that came from regular dismantling shops, which currently do not exist in sufficient numbers.

But for most current car models, parts are not easily available in every city.

Repairs would take too long and cost more.

In this way, insurance companies requested and authorized the use of generic parts, which are often made by suppliers of large car manufacturers, without the original brand, but which comply with the same specifications.

However, there are automakers who are contesting this decision and do not agree with the use of generic parts.

There were also changes to the new regulations, regarding the minimum coverage that must be compensated for damage caused to the vehicle by collision, which must now also include partial damage.

Packages with total loss compensation only will not be permitted.

It will also be possible to choose a specific value, stipulated at the time of the contract or choose the traditional insurance modality, which is the value in the Fipe Table.

When does popular car insurance pay off?

Does your vehicle fall under popular and traditional auto insurance but you don't know which one to choose?

The first point to be analyzed is the amount available for traditional insurance.

Another important factor is the chance of an accident occurring, as the deductible is 30% more expensive.

Therefore, for cars that are rarely used, popular car insurance pays off.

Even so, each client must decide which insurance is the most favorable, as the lifestyle of each insured person is the main influencing factor.

Still, it is important to mention the importance of this type of insurance in including cars and families that do not have enough to take out insurance to protect their assets.

And even with popular insurance, it is possible to customize the coverage and extras, making it more suitable for the lifestyle and needs of the insured.

Within the coverage there is 24-hour assistance and a tow truck, which covers an area of ​​100 km of the region where the insured person lives.

But it is possible to contract additional charges, such as liability for moral, aesthetic and civil damages.

These extras impact the value of the insurance, but make it more complete.

For those who want to be more protected and can afford the insurance, it's worth it.

Taking out popular car insurance

It is important to note that when purchasing popular car insurance, it will probably not be the first option offered by the broker.

And this is not bad faith on the part of the professional, nor an attempt to sell a more expensive product.

Brokers are receiving this guidance.

Except when the customer arrives asking for popular car insurance.

Even so, the broker must clearly explain the difference in the modalities, and above all, all the conditions that make this insurance cheaper.

One of them is that at the time of repairs, only some workshops will work with this insurance.

The company will provide a list of them, but it is a more restricted list of companies when compared to the traditional modality.

Popular auto insurance will only be offered by the broker when traditional insurance is out of the customer's budget, or when the vehicle is not compatible with traditional auto insurance.

However, it is necessary to hire a trustworthy broker and carefully analyze the insurance being contracted, as there are companies that offer other types of insurance and call it popular.

However, these products are not within the SUSEP regulations, which can be characterized as fraud and misleading advertising.

That is why it is important to know the correct characteristics of the type of insurance to be chosen, as well as contact a good broker, analyze the policy carefully and not have any doubts at the time of contracting.

These doubts can be costly at the time of an accident.

Did you already know about popular car insurance?

Did you know this option existed?

Share this article with your friends so they can also analyze and even hire this cheaper and more accessible option to protect your car from unforeseen events.

*This text is editorial content and does not guarantee the sale of this product on this website.