What is the maximum compensation limit for car insurance?

Did you know that there is a maximum compensation limit on car insurance?

Car insurance has its value defined based on the vehicle itself and other factors.

This way, you will have greater compensation if you own a car worth above market value. These cases include luxury cars, new releases or famous brands.

What is the maximum compensation limit for car insurance?

If your car has a very high maintenance price or very expensive replacement parts, this could end up causing some loss to the insurance company. That is why there is a certain limitation regarding the compensation that will be paid.

In order to protect themselves against large losses, insurers use the LMI, or maximum compensation limit. The insurer itself sets this ceiling in its insurance contracts, and it is the maximum amount it will pay for the covered risk.

Typically, the insurer defines this limit together with the policy holder. Therefore, when hiring, think about the best possible choice, considering the area in which you live, your traffic habits and average repair costs for your car.

Types of car insurance compensation

In car insurance there are two different types of compensation that can be made: partial and full.

What is partial compensation?

Partial compensation is made when the accident causes losses that exceed the value of your deductible, defined at the time of contracting and stipulated in the policy.

To receive partial compensation, an accident or breakdown and its repair cannot exceed 75% of the total value of your vehicle.

In this case, the insurance company will be responsible for the repairs while the policyholder must pay the deductible determined in their policy.

Partial compensation is mainly made when your vehicle can be repaired. After the accident, he will go to the workshop where the mechanic will make his report.

It is worth remembering that the insurance company must accept the repair quote from the mechanic, otherwise the insurance company may not be compensated.

What is full compensation?

Full compensation is made when your vehicle is stolen or stolen and, even after the police report, it has not been located.

Furthermore, you must also receive it if the vehicle repair value exceeds 75% of the total value of your car.

In the event of a total loss, when the repair cost is higher than what is stated in the policy, the designated workshop will carry out a report to diagnose the problem.

Generally the workshop used by the holder is indicated by the insurance company, as it is someone they know will not forge a document.

Deadline to receive insurance compensation

After opening a claim, you must send the documents requested by the insurance company and wait for guidance on what to do.

As soon as you receive guidance on how to proceed, whether in the case of theft, theft, collisions, accidents or others, they will have 30 days to deliver compensation. If any other document is requested, the deadline is suspended. After shipping, the 30 days begin again.

Always contact your car insurance when you suffer an accident?

You should not always or need to claim insurance. First, you must analyze the damage the vehicle has suffered.

Some small damages, with a low maintenance or repair cost, are not worth claiming insurance.

To find out if it's worth it, calculate how much you would spend at the workshop on a repair yourself, and how much your deductible would be. If the deductible is more expensive, it would be a disadvantage to activate your insurance.

Knowing that insurance has an indemnity limit, you can make better choices in your policy, making a smarter contract.

Together with your broker and insurance company, establish limits that make sense for you, your habits and what you may need in the future.

Now that you understand how the maximum compensation limit in car insurance works, you can now hire the service that will protect you and your vehicle.