Understand how this car insurance works!

Have you ever heard of multi-year insurance? Find out what it is!

The insurance market is growing increasingly, with innovative modalities. One of these is multi-annual car insurance, which is less popular.

Check out all the information you need to make an informed choice below:

First of all, what is annual insurance and multi-annual insurance?

So that you can choose the best insurance options, you must understand the differences between each of these different types.

Annual insurance

Annual insurance is what the name suggests. This insurance lasts for one year and after the end of this term, the contract can be renewed.

Contract renewal may vary depending on whether the customer wishes to continue with the service or not.

However, be aware that sometimes contracts may have automatic renewals if there is no confirmation or denial from the customer. This means that the insurer can continue the service and charge for another year.

Multi-year insurance

The term of multi-year insurance varies, and can last from 6 months to several years.

However, the validity period of each insurance company will be different, as each company has specific actions and guidelines.

It is worth mentioning that not all insurance companies have a multi-annual plan in their services.

Main differences between annual and multi-annual insurance

The main differences between these two types of insurance are mainly in terms of validity.

In annual insurance it only lasts one year, while in multi-annual insurance it can last between 6 months and more than a year.

Payment

There is still a difference in the payment method. In an annual plan you will pay the monthly fee, which is generally divided into 12 installments, while in a multi-annual plan, the entire amount of your insurance premium plan must be paid in the first year. This payment can be made in full or in 12 installments, but if the insurance is valid for 3 years, the amount for the 3 years must be paid in the first 12 months.

Cancellation and return

The cancellation and return conditions are also a point of difference.

For this cancellation process to be carried out, insurers use a Short Term Table, which relates the period for which the client was effectively covered by the insurance with the value of the premium already paid.

Annual and multi-annual insurance have differences regarding the amount that will be returned, since both have 12 total installments to be paid, but refer to different coverage periods. In the case of annual insurance, the period considered is one year, and in multi-annual insurance, the 12 installments refer to more than one year of coverage.

Discounts

Multi-year insurance also offers the opportunity to get a discount because you are paying in advance for later years of coverage.

What is the most advantageous type of insurance?

To understand which insurance is most advantageous for your needs, you will need to evaluate all the conditions, especially the financial ones.

Multi-year insurance requires you to be willing to spend more in one year to be insured for the next 2 or more years.

For those who keep a car for long periods, multi-annual insurance is more suitable, as its duration is longer than that of just annual insurance.

When looking for insurance, you will need to know all the coverage and conditions that this insurance offers you, what services they include and how they can help you in unexpected situations.

How to choose the best insurance?

So that you can choose insurance that matches your needs, keep in mind the main coverages that are most important and cannot be missing from your policy.

Check which modality is best, whether it is annual or multi-annual, and what benefits each of them provides for you.

Talk to brokers and get quotes to find out both the best conditions and the best prices available.

Also understand whether insurance companies have benefit clubs with discounts that make a difference in your use, or whether they have assistance that can be very valuable for any problems that arise on a daily basis.

Now that you know the difference between these two types of car insurance, you can make better choices and have a wide variety of options.

Multi-annual insurance is a great choice, you just have to keep in mind which conditions it is best suited for!