Car Insurance
The primary use of car insurance is to ensure the financial protection of those affected by physical damage to their property and/or bodily injury in a traffic accident. Having your car insured is a requirement by law (L.A.M.) and helps insure the driver and others of their right to compensation should any damage be caused in a traffic accident.
Here follows important information belonging to this insurance (L.A.M.):
1. This insurance covers the damage that the driver of the vehicle might inflict upon another person or property. This insurance does not cover any damages caused towards the insurer, his/her vehicle, his/her family or his/her property. The maximum amount that will be covered is stipulated within the insurance policy, but:
a. By law (L.A.M.) this is AWG 90.000, although as insurance brokers we disadvise against this. The reason being that it is not a responsible coverage, seeing as cost have increased dramatically both in material and care. As a broker our responsibility is in making sure our clients are properly insured. It is in your interest that you start with the coverage of AWG 150.000 and slowly go up to a minimum of AWG 300.000 in order for us to be secure in knowing that you as our client is protected financially should anything happen.
2. When involved in a traffic accident of any nature it is an obligation to call the Police. The Road Service provided by your insurance company must also be notified.
3. If your vehicle has caused damage to another (third party) you have to stop by your closest broker branch in order to fill out a claim form. In order to fill out the claim form you will need:
a. The driver license of the one responsible for the damage.
b. The insurance papers.
c. The accident form provided to you by the Road Service of your insurance company.
4. When selling your car it is important to know that the existing car insurance policy of the vehicle cannot be continued. As soon as the car is sold it is required that you bring the insurance papers to your closest broker branch in order to return these to the insurance company to start the cancellation process. If this cancellation is not done promptly and the car is involved in an incident you will be held financially responsible.
5. If the car or car number is changed please notify this to your broker. If you fail to do this and your car is involved in a traffic accident your insurance policy will be void.
6. When your insurance is cancelled your no claims discount will be valid for up to one year.
7. It is stipulated in the Compulsory Law (L.A.M.) that for every accident you are responsible for a deductible will have to paid of AWG 150,00. Exceptions to this are:
a. Insurance companies increase this deductable when the driver is under the age of 23 or if the driver has been in possession of their drivers license for less than 5 years.
b. Some insurance companies increase this deductable when the driver responsible for the accident is not mentioned on the insurance policy. It is therefore important to have all drivers of the vehicle mentioned on your insurance policy.
8. The Compulsory Law (L.A.M.) also gives the insurer the right to go directly to the insurance company of the one responsible for the accident if they do not comply with their duties. If this is the case the insurer will have to pay the AWG 150,00 to the company and when the driver responsible for the accident pays this to the company you will get it paid back to you.
According to the conditions set on your insurance policy, companies will not cover any damage caused by these following reasons:
a. If the person responsible for the damage is not in possession of a valid driver’s license.
b. If the person responsible for the damage is under the influence of alcohol or any other narcotics.
c. If the person is not a responsible driver (e.g. falling asleep behind the wheel, street racing, drifting, etc).
Other than the compulsory car insurance you also have the option of taking out the
Third Party Liability Plus coverage for your car as long as your car isn’t older than eight (8) years old. This insurance covers :
Coverage according to the Compulsory Law (LAM)
Fire
Theft or Joyriding
Explosion
Insurance companies can add one or more types of coverage, but basically these are what all insurance companies cover.
You also have the possibility of taking out a
comprehensive coverage. Which not only covers the coverage’s stipulated by the Compulsory Law (LAM), but will compensate damages whether you are the guilty party or not. It is important to note that unlike the name suggests it won’t cover all types of damages. These are the two basic coverage’s:
1. If your car is brand new, straight from the dealers, you can apply for a
full value coverage, the specific name varies by insurance company. This insurance can be taken out for a maximum of three (3) years, where should there be a case of ‘total loss’ of your car following an accident there won’t be any price devaluation of your car based on depreciation. After these three years you can opt for the All Risk coverage. When you are taking out a car loan at a bank this coverage is mandatory. After these three years you can opt for the comprehensive coverage known as, All Risk. When you are taking out a car loan at a bank this coverage is mandatory.
2. You also have the coverage known as
All Risk. Unlike the
full value Coverage when following an accident your car is declared a ‘total loss’ the insurance company will apply devaluation on your car based on the depreciation table. Which on Aruba is as follows:
a. 1 years > 25%
b. 2 years > 20%
c. 3 years > 15%
d. 4 years or older > 10%
All car insurance policies accumulate yearly a 10% discount if no accident has occurred during this period. Certain insurance companies will allow this discount to accrue to 60% on the coverage of your car. With an all risk this discount could go up to a 70% discount. Every insurance company competes with each other on these terms, which gives the client a lot of options to choose from.
Passenger Accident Insurance
A car in most cases is not only occupied by ourselves. We often find ourselves driving along with family members, friends or acquaintances. Your car insurance does by no means always cover the injury that your passenger may suffer because of an accident with your car. That insurance only covers the damage when you are legally liable for it, this excludes family members. That is why it is important to have a passenger accident insurance in order to have protection for your fellow family members in the car.
The insured amount will be divided between the passengers that where present in the car during the accident.
Passenger accident insurance is tied to the car you have insured. When you change the car you also have to remember to notify your broker to change the passenger accident insurance to your current vehicle.
Please note, every insurance company has their own policy, which may vary. And therefore the information we provide is liable to change depending on your current insurance policy.
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