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Car insurance bonus

Verified 23 April 2020 - Directorate for Legal and Administrative Information (Prime Minister)

The bonus-malus is a system of modulation of the insurance premium according to the behavior of the insured. This modulation shall take place at each annual maturity, on the basis of claims involving the insured person's liability. The basic premium is reduced in the absence of a claim, and increased when there has been one or more claims. In case of a change of insurance, you keep your bonus-malus coefficient and the insurer must issue you an information statement.

The bonus-malus system, still called reduction-increase ratio, is a formula for reducing or increasing the insurance premium at each annual maturity.

This change is based on claims where your liability has been recognized over a reporting period. The absence of a claim over the period allows you to reduce your coefficient of reduction-increase.

If there have been one or more claims in the period in which your liability has been recognized, this may result in an increase in your reduction-increase coefficient.

Each year, the reduction-increase coefficient. shall be applied to the reference premium, i.e. the premium calculated at the time of subscription, to determine the new amount to be paid.

If your coefficient has decreased, you will have a reduction in the reference premium and you will pay less for your insurance.

If your coefficient has increased, you will have an increase in the reference premium and you will pay a higher rate.

The bonus-malus system applies to all motor land vehicles, except for exceptions, as indicated in the insurance contract. Exceptions include 2 or 3 wheels (up to 125 cm)1 or 11 kw of power), collector cars (over 30 years of age) and agricultural and forestry machinery.

The claims taken into account for the application of the bonus-malus are those in which your total or partial liability has been recognized, and which have resulted in compensation from the insurer.

FYI  

the towing of the vehicle may give rise to the application of the malus if the breakdown of the vehicle is linked to a guarantee taken into account for the calculation of the bonus-malus.

The bonus-malus takes as reference the period of 12 consecutive months preceding the annual contract maturity by 2 months.

Example :

For a contract with an annual maturity of 31 December 2020, the reference period shall be 1to November 2019 to October 31, 2020.

The insurer is obliged to apply the bonus-malus rule. However, the benchmark premium is determined by the insurer, and each insurer has its own benchmark premiums. You must therefore check the applicable reference premium in the contract.

Vehicle insurance premiums are calculated using a bonus-bonus (or bonus-malus) system, which takes into account accidents reported by the driver.

The starting coefficient is 1.

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Bonus

For each accident-free year in which a part of your liability has been deducted, you benefit from a 5% of your coefficient from the previous year.

It is therefore sufficient to multiply the coefficient of the previous year by 0.95 to obtain the coefficient of the year, if there has not been an accident involving a share of responsibility of the insured. The coefficient is rounded by default to 2 digits after the decimal point.

The maximum reduction shall be 50% (coefficient 0,50). Beyond that, the coefficient does not change.

Picture of the bonus-malus

Contract Age

Bonus coefficient

Calculation of the coefficient

Example with a reference premium of €1,000

Subscription

1

-

€1,000

1to anniversary

0.95

1*0.95 = 0.95

€950

2e anniversary

0.90

0,95*0,95 = 0,9025 rounded to 0,90

€900

1e anniversary

0.85

0,90*0,95 = 0,855 rounded to 0,85

€850

4e anniversary

0.80

0,85*0,95 = 0,8075 rounded to 0,80

€800

5e anniversary

0.76

0,80*0,95 = 0,76

€760

6e anniversary

0.72

0,76*0,95 = 0,722 rounded to 0,72

€720

7e anniversary

0.68

0,72*0,95 = 0,684 rounded to 0,68

€680

8e anniversary

0.64

0,68*0,95 = 0,646 rounded to 0,64

€640

9e anniversary

0.60

0,64*0,95 = 0,608 rounded to 0,6

€600

10e anniversary

0.57

0,60*0,95 = 0,57 rounded to 0,57

€570

11e anniversary

0.54

0,57*0,95 = 0,541 rounded to 0,54

€540

12e anniversary

0.51

0,54*0,95 = 0,513 rounded to 0,51

€510

13e anniversary

0.50

0,51*0.95 = 0,48 rounded to 0.5 coefficient maximum

€500

Please note

the coefficient obtained by applying the bonus-malus rule shall be adjusted in accordance with the number of claims recorded by the insurers in the preceding year. This is the technical disaster coefficient..

Malus

For each accident responsible, the insured is subject to a 25% increase.

To determine the resulting coefficient, the coefficient before the accident is taken and multiplied by 1.25.

Example :

Example:

  • You have a coefficient of 0.68.
  • 1to accident will result in a new coefficient, namely: 0.68 * 1.25 = 0.85.
  • If you have a second accident in the same year, your coefficient will increase to: 0.85 * 1.25 = 1.06.

The maximum coefficient shall be 3,5. Thus, for a reference premium of €1,000, the insured who has a coefficient of 3,5 will pay a premium of €3,500..

When the insured is declared partially responsible for the accident, the mark-up is 12.5%. In this case, the coefficient will return to 1 if it has no accident responsible for 2 years.

FYI  

if you have a coefficient of 0.50 for at least 3 years, the 1to The accident does not cause the malus to be applied.

Bonus and Malus Articulation

When subscribing to 1to contract you have a coefficient of 1.

If you do not have an accident involving part of your responsibility in the first year, you get a discount of 5%.. Your coefficient for the second year will therefore be: 1*0.95 = 0.95.

If you have an accident responsible during the 2second year, you will be subject to a 25%.. Your coefficient for the third year will therefore be that of the second year plus 25% :: 0,95*1,25 = 1,1875, rounded to 1,18.

To determine the coefficient of the 4'th year, the coefficient of the 3second year or a reduction of 5% or an increase of 25% whether or not there has been a responsible accident.

You keep your bonus-malus coefficient at the end of your insurance contract. It will be automatically transferred in the following cases:

  • You change vehicles
  • You change insurers
  • You buy an additional vehicle (provided there are no new usual drivers).

Each year, when your contract expires, your insurer issues you a statement of information. This document lists your bonus/malus ratio and the list of claims that occurred during the previous 5 annual periods. You can also request this statement at another time.

This statement will be essential if you wish to change insurer.

If you sell your vehicle and don't pick up one immediately, your contract will be terminated. If the interruption is less than 3 months and you have not suffered any claim involving a part of your responsibility in the year, you will benefit from an evolution of your bonus by subscribing to your next contract.