What does the bonus look like if the insurance category changes?

See in this article what the bonus class looks like when there is a change in the car insurance rate category. And, how the tariff category works.

The rules followed by insurance companies are constantly changing. In July of this year (2018), another change occurred. This time in relation to the loss of the insurance bonus class, when a tariff change occurs.

In this article, in addition to explaining better how this change works, we will explain what the tariff category is and why it impacts car insurance bonuses, follow along.

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Understand what the fare/tariff category

The auto insurance rate category is the class in which the vehicle or its use fits. For example, passenger cars are in one fare category, motorcycles in another and taxis in another.

Auto insurance coverage also has different tariff categories. In other words, comprehensive coverage is part of a certain category, while simpler coverage, just for theft or theft, is part of another.

The rate category is fundamental in determining the price of car insurance, in addition to all other information that affects the value of the insurance, such as the driver's profile and vehicle model, for example.

Each of these categories has a different tariff and, consequently, a different price. Rate categories not only influence prices, they also influence clauses, coverage and contractual issues. For example, passenger cars cannot take out loss of profits coverage, this is coverage only available for cars for commercial use such as taxis.

How does the bonus class work when the category is changed?

Because it is so fundamental in the pricing of car insurance, the rate category also influences the insured's bonus class, so when it changes, the bonuses also change.

And, it is precisely this change that underwent a change in the rules this year. Previously, when there was a change in the auto insurance rate category, the insured would lose two points in the bonus class. Now, with the change he only loses one class point.

Example: Joaquim had a passenger car and a bonus class of 8 points. He then decides to sell his car and buy a motorcycle, this will cause Joaquim's tariff category to change and consequently he will lose points in his bonus class. Before the rule change, Joaquim would lose two points in his bonus class, going from 8 to 6 points. Now, with the new rule he only loses one, that is, he will go from 8 points to 7.

Where can I find this information in the policy?

This information about the change in the bonus class, when there is a change in the insurance category, must be included in the policy in the CGS part – General Conditions of the Insurer.

In the image below you can see an example of this information, we have separated the general conditions part of a policy from the Tókio Marine insurance company. In the first table a contract before the change promoted in July, in the second one after the change, see below:

What are bonus classes?

If you don't know very well what bonus classes are and what they are for, follow along and find out.

The bonus class is a discount offered to the insured by insurers whenever they do not record any claims during the term of their policy. This bonus is cumulative, that is, for each year without a registered claim, the insured person gains one point in their bonus, and for each registered claim, they lose one point.

It works differently for each insurance company, but generally, each bonus class offers a 5% discount on the final value of the policy when renewing the insurance. We cannot fail to say that this class of bonus belongs to the insured, that is, if they decide to change insurers they may lose their points.

In short, the bonus class is linked to the insured and not to the vehicle or insurance, it is cumulative when there are no registered claims and, with the new change in the rules, the insured now only loses one point when the insurance rate category is changed . We hope this content is clear, however, if there are still any questions, we are at your disposal for further clarification.