Auto insurance – BTS Insurance Course

Summary

Auto insurance plays a key role in the daily lives of French drivers. Mandatory for all motor vehicles, it provides financial and legal protection essential in case of an accident, theft, or damages. Among the different coverage options, additional options, and the bonus-malus system, it is not always easy to navigate.
In this article, we will review the essentials of automobile insurance: its purpose, main plans, key coverages, as well as best practices for choosing the most suitable contract for your profile. Whether you’re a young driver, an insurance student, or simply curious to better understand your policy, this guide will give you a clear and structured overview to master the fundamentals.

What is auto insurance used for?

Insurance is ubiquitous in the daily life of the French. Automobile insurance is a guarantee that provides coverage in case of a claim. In many situations, auto insurance helps you face difficulties. There is a legal obligation to insure all motor vehicles, including passenger cars such as:

• utility vehicles,
• two- and three-wheeled vehicles,
• motorcycles and scooters,
• quads,
• even lawnmowers with self-propulsion.

This obligation also extends to vehicles:

• without a license,
• to non-approved two- or three-wheeled vehicles (mini-motos),
• as well as vehicles that do not circulate. Such as collection vehicles.

What does an auto insurance contract consist of?

In most companies, we find 3 coverage plans:

Third-party plan :

The essential guarantee that every driver must have is liability coverage. This guarantee covers damages that the driver(s) of the vehicle might cause to others. Damages can affect a pedestrian, another vehicle, or the passenger in the car.

This plan also includes a defense and recourse guarantee. This covers part of legal costs in case of a dispute. The defense and recourse guarantee only applies with the associated contract.

For example, if you have a defense and recourse guarantee with your auto contract, it will only intervene for disputes related to that contract.

The third-party plan allows you to pay the minimum insurance premium. Insurers recommend this plan for young drivers with older cars. A low premium means fewer guarantees.

Enhanced third-party plan :

This plan includes the same guarantees as the third-party plans. Fire, glass breakage, and theft coverages are added.

The fire and theft coverages will compensate the insured up to the value of their vehicle at the time of fire or theft. This value is called the market value, representing the vehicle’s value on the used-car market.

It mainly depends on the vehicle’s age and mileage. Experts tasked with determining the market value rely on the “Argus rating.” It serves as a reference for automotive professionals.

Be careful with cars over 30 years old that are not collectible cars, as they are no longer rated by Argus; the expert will have to refer to the market for used vehicles of this type.

Here are some examples of cars over 30 years old that are no longer rated by Argus: BX Citroën, Renault 25.

Glass breakage guarantee

This guarantee covers cracks or replacements of your windshield. It is not very expensive and is available starting with the enhanced third-party plan. Be sure to verify if your policy covers mirrors and panoramic roofs, as some insurers do not cover these elements. The glass breakage guarantee often has a franchise of €0.

During windshield replacement, a franchise may apply that you will have to pay. However, repairs in an approved center by your insurer will incur no cost to you. Just ensure some conditions are met: the impact must be smaller than a €2 coin, and it must not be in your line of sight.

Compensation is never immediate: the delay for the loss to be finalized is specified in the contract, usually about one month.

📊 The Bonus-Malus System in Auto Insurance

The bonus-malus system is one of the most critical elements in setting your auto insurance premium. It involves a mechanism of discount or surcharge applied to your annual premium, depending on your driving behavior over the past year.

➕ The bonus: a reward for good driving

Every responsible year without an accident results in a 5% reduction of your premium, calculated on the current coefficient. The initial coefficient is 1.00, and the bonus can go down to 0.50, which represents a maximum 50% reduction on the premium.

Example :

• 1st year without an accident → coefficient 0.95

• 5th year without an accident → coefficient 0.77

• 13 years without an accident → coefficient 0.50 (legal maximum)

➖ The malus: a penalty in case of responsible accident

Each responsible claim results in a 25% increase in the coefficient. The coefficient can rise to 3.50, which can more than triple the premium amount.

• A responsible claim with a coefficient of 1.00 → increases to 1.25

• Two claims within the year → coefficient multiplied by 1.25 twice

🔄 Return to bonus after malus

In the absence of new claims, the coefficient decreases by 5% per year after a malus is applied. After 2 years without an accident, the malus is removed (returning to 1.00).

📌 Example of evolution

👉 For young drivers, the bonus-malus can greatly vary the insurance cost over the years. Therefore, it is crucial to drive carefully from the start.

Cost recovery with your insurer’s approval

Restoration costs with expertise within market value limits

For the theft coverage to activate in case of an attempted theft, the insured must provide tangible proof of the attempt (forced lock, broken windows, disassembled anti-theft device, possibly testimonies, etc.) only the cost of repairs is indemnified.

– If the vehicle is recovered after more than a month, the owner can choose to abandon or buy back the vehicle by reimbursing the amounts received.

– The insurer can require the insured to install a GPS tracker to facilitate recovery. For cars costing over €70,000, the insurer will always require the installation of this device.

– Beware of false declarations many people make to pay lower premiums. If during registration you claimed your vehicle was stored in a locked garage, but during the claim, your car was parked on the street in front of your house.

– Except for explicitly purchased coverage, valuable items are not indemnified. Some parts of the car, like the battery, are also not covered.

In case of a claim, your bonus will stay unchanged, but insurers will try to recover on your premium, meaning they will raise it.

All-risk insurance covers damages caused by your own fault.

The all-risk plan:

This plan includes the same guarantees as the enhanced third-party plan, with added coverage for all accidents and replacement with new parts for 24 or 36 months.

The all-accident damage guarantee covers damages even if you are responsible. For example, a common case: you collide with a retractable barrier, damaging your bumper. The insurance will cover damages exceeding the deductible. For instance, if your deductible is €150 and damages total €300, the insurer will pay €150, and you will cover the remaining €150.

New for old replacement guarantee

The new-for-old guarantee is available for new vehicles or those that have been on the road less than 24 or 36 months, depending on the insurer. After theft or total destruction, the insured can choose to:

• Replace the damaged vehicle with a new one of the same value;
• Or receive reimbursement of the original purchase price.

To understand how to determine the right to compensation in a claim, click here.

If you want to learn about the claims management process in auto insurance, click here.

You now have the basic knowledge of auto insurance.

Thank you for reading this article. Remember, you can receive review questionnaires by clicking the button below.

Optional Guarantees

🧾 Important optional guarantees to know

In addition to basic plans, insurance companies often offer optional guarantees. These allow you to customize the policy to your specific needs.

🧑‍⚖️ Legal protection

This coverage pays for lawyer fees, expert assessments, or legal procedures in case of a dispute (e.g., after an accident or liability contestation). It provides valuable legal assistance, especially in disputes with third parties or public authorities.

🚐 Breakdown assistance 0 km

Unlike standard assistance, which only intervenes within a certain area, this option allows breakdown service at your home. It is very useful for older vehicles or in case of unexpected immobilization.

🚑 Driver’s guarantee

Often overlooked, this guarantee covers personal injuries sustained by the driver, which are not covered by liability insurance. It can include compensation in cases of disability or death.

💼 Transported objects

It covers the loss or damage of personal effects left in the vehicle (laptop, bag, suitcase…), provided they are properly secured.

🆕 Extended new-for-old value

Some companies allow extending the new-for-old value beyond the standard 24 or 36 months. This enables, in the event of total loss, compensation equivalent to the vehicle’s initial purchase price, even several years later.

👉 These options are especially interesting for frequent drivers, families, or owners of new vehicles.

Coverage exclusions

⚠️ Critical coverage exclusions to understand

Auto insurance policies do not cover all situations. Some legal or contractual exclusions result in no coverage at all, even if you are insured.

🚫 Driving under the influence of alcohol or drugs

This is an automatic exclusion: no reimbursement is planned if the driver is in violation.

🚗 Invalid or revoked license

The insurance becomes void if the involved driver does not have a valid license at the time of the claim.

📝 False declarations

For example, claiming the vehicle is stored in a locked garage when it was parked on the street can lead to reduction or denial of coverage.

💼 Non-compliant use

Using a vehicle declared for “personal use” in a professional context without informing the insurer can be considered a false declaration.

🔥 Voluntary claims or fraud

Any attempt at fraud or intentionally caused loss results in a complete cancellation of coverage and possible legal action.

👉 Carefully reading the general conditions is essential to avoid surprises in case of a claim.

Practical Cases / Concrete Examples

🧪 Practical Cases to Better Understand

To make the theory more concrete, here are typical examples illustrating differences between plans:

🚗 Responsible third-party accident

A driver hits a barrier while parking. The “third-party” plan covers only damages caused to others → no coverage for their own vehicle.

🔥 Fire with enhanced third-party

A vehicle is set on fire in a parking lot. With the “enhanced third-party” plan, the insurer covers damages based on the market value at the time of the claim.

🧊 Glass breakage

A crack smaller than a €2 coin on the windshield is repaired free of charge at an approved center, with no deductible.

🧍‍♂️ Driver’s guarantee

Only the driver injured in a responsible accident will be indemnified if they have purchased the driver’s guarantee.

💼 Stolen items in the car

A forgotten bag on the seat is stolen. Without “transported objects” coverage, no compensation is provided.

👉 These concrete scenarios are particularly useful for BTS Insurance students, as they are close to exam practical cases.

How to Choose Among Different Auto Insurance Plans?

As we’ve seen, the world of auto insurance is quite complex. Indeed, offers can vary greatly from one insurer to another, which leaves many motorists puzzled. Between third-party plans, comprehensive insurance, and options, it’s understandable that choosing is difficult. Fortunately, there is a simple solution to select the best insurance for your vehicle.

Insurance comparator, an essential ally for choosing the right plan

When insuring a first vehicle or renewing a policy on an existing car, it’s wise to review the various options available to you. Depending on your situation, different plans or packs are available and require your choice. However, before making your decision, always compare the different offers available.

To be effective in your search for the best auto insurance contract, be rigorous. Start by assessing your actual insurance needs. If you drive infrequently, it might be more advantageous to subscribe to a specific low-mileage insurance contract, for example. This can help reduce your premium.

Then, use an online insurance comparator, which is simple and quick. A list of the top insurers based on your query appears within moments.

Savings at stake

To learn everything about the different auto insurances available on the market, consult a dedicated comparison site like Les Furets. This well-known site analyzes proposals from various insurers to allow you to compare offers with similar guarantees. This way, you can choose the cheapest policy while enjoying the same coverage as more expensive competitors.

Procedures in Case of a Claim

📝 Steps to Follow in Case of a Claim

In case of an accident or theft, it’s crucial to follow a rigorous procedure to ensure smooth compensation:

1. 🚨 Secure the scene: mark, protect people, call emergency services if necessary.

2. 📄 Fill out the accident report immediately, accurately and legibly.

3. 📞 Inform the insurer within 5 working days (2 days in case of theft or vandalism).

4. 📚 Provide all proof: report, photos, quotes, invoices, police report…

5. 🧑‍🔧 Await expert assessment if necessary (especially for major damages).

6. 💰 Receive compensation according to the coverage and the vehicle’s market value.

👉 Failing to respect deadlines may result in reduced or denied compensation. Acting quickly is advisable.

🏁 Conclusion

Auto insurance is not just a legal obligation: it is a true daily safety net. Properly understanding the differences between plans, knowing the included or optional guarantees, and anticipating how the bonus-malus works can help you make informed choices and avoid unpleasant surprises in case of a claim.
Before signing a policy, take the time to compare offers, assess your real needs, and carefully read the general conditions. Proper preparation ensures optimal coverage while keeping your budget under control.
👉 For further information, check our other articles or download our revision quizzes for testing your auto insurance knowledge.

❓ FAQ about Auto Insurance

What is the difference between third-party and comprehensive insurance?
→ Third-party insurance covers only damages caused to others, while comprehensive also covers damages to your own vehicle, even if responsible.

Is it mandatory to insure a non-driving vehicle?
→ Yes, every motor vehicle must have at least third-party coverage, even if parked on private property.

How does the bonus-malus system work?
→ The bonus decreases the premium each responsible year; the malus increases it after an at-fault accident.

What guarantees are useful for young drivers?
→ Enhanced third-party plan + driver’s guarantee + 0 km breakdown assistance for balanced protection at lower cost.