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This information is intended to be a summary of the policy cover. For complete details of the policy cover, terms and conditions, please refer to the policy document.
Motor Insurance in Bermuda
Since it's regulated
by the government, motor insurance is standard in the local market. But insurance
companies go beyond the basic requirements and offer options designed to enhance
the motor cover.
The law (The Motor Car Insurance (Third Party Risks) Act 1943 as Amended) requires
that if you use a motorised vehicle on Bermuda's roads you have an insurance policy
in force with a licensed and recognized insurance company. The minimum cover required
by the Act is a policy that provides $125,000 for third party injury and property
cover. At BF&M our policy offers you protection for $5 million against third party
injury with an inner limit of $500,000 for third party property damage. These
limits are for each and every event. When you buy your motor insurance you'll
receive a Certificate of Insurance which is required by law. The Transport Control
Department will need to see this certificate in order for you to license your
vehicle for road use. In addition, the police have the right to request proof
of your insurance policy and the certificate is that proof. We suggest that once
you have licensed your vehicle that you keep the certificate in a safe place.
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How much Insurance is enough?
As stated, the minimum requirement by law is $125,000 Third Party cover. This
is to cover injuries to any other person, or their property. We offer policies
with higher limits than that required because we believe that the minimum is not
sufficient. Recent court awards for serious accidents have easily exceeded the
$125,000 amount. Providing you with a policy that does not fully protect you would
be wrong. If you found yourself in the position of dealing with a large third
party liability claim, we would not be comfortable knowing that your policy may
not cover all costs related to the claim. Remember- you would be responsible for
any amount in excess of the policy limits. It is not required by law to purchase
anything but insurance for third party injury and damage, however if you have
a newer automobile, you'll want to protect your financial investment and consider
purchasing comprehensive cover. If you have financing on your automobile, the
bank will generally require that you insure your automobile for comprehensive
cover. They may not release the funds to purchase the automobile until you commit
to that cover.
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Paying a motor policy excess
When you make a claim for damage to or loss of your own vehicle, a small portion
of the claim is always paid by you first, then we pay the balance of the claimed
amount subject to the policy terms and conditions. The portion you pay is called
your policy excess. The amount of your excess depends upon a number of factors,
however the age of the driver is the leading one. There are certain occasions
when we might accept a higher excess in return for a reduction in the annual premium.
If you are uninsured, you will be charged with driving without insurance, and
you may be fined. You may also have your driver's license suspended.
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Comprehensive Cover
Comprehensive cover combines the elements of own damage protection and third party
insurance protection.
- The own damage section
protects your car against loss or damage. This would include accidental damage
arising out of the use of the vehicle, windstorm damage and vandalism. There is
usually a policy excess for own damage cover. This amount is either paid by you
toward the cost of repairs or is deducted from the claims settlement.
- The third Party section
of the policy provides cover up to $5 million for your liability to passengers
or third party injury and an inner limit of $500,000 for damage to third party
property. Legal fees relating to defending any court action are also covered as
long as we are aware of them and have agreed that they are necessary to defend
the action.
- An additional benefit of
the comprehensive policy is the limited medical expense cover. If the driver,
insured or passengers of the vehicle sustain injury that require medical attention,
the policy will pay up to $500 any one claim for reasonable medical expenses if
theses expenses are not covered by any other policy of insurance.
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Third Party only cover (Liability)
If you are legally
responsible for an accident, then you are also legally responsible for the damages
or injury that you cause. The third Party section of the policy provides cover
up to $5 million for your liability to passengers or third party injury and an
inner limit of $500,000 for damage to third party property. Legal fees relating
to defending any court action are also covered as long as we are aware of them
and have agreed that they are necessary to defend the action.
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Your driving record
The policy premium
is partly based on your driving record. This means the number of years you've
been licensed to drive, your previous insurance experience, and any convictions
or accidents (in the last 5 years.) you may have had. If you drive safely and
defensively, are accident free and have no convictions, your premium will be lower
than if you've had a conviction or accident. Most insurance companies will reward
claims free driving by giving the insured driver a No Claims Discount (NCD) for
each year they are claims free. Your driving experience will be reflected in the
current NCD you are enjoying. This NCD adds up and could mean as much as 60% off
the premium. Most insurance companies will accept proof of your driving experience
from your previous insurer. If you have a legitimate gap in your insurance track
record, the insurance company will take this into consideration when calculating
your automobile insurance premiums. In a nutshell, the better your driving record,
the lower your insurance rates.
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Your Car
The premium for the
car is based upon two factors. The actual claims experience of the makes and models
of automobiles are looked at to establish a part of the premium. This means a
check is made into repair costs, the rate of injury, and the likelihood the car
may be stolen. The other component is the Motor Dealer's suggested replacement
cost of the car. These two factors are combined and a premium is calculated. It
goes without saying that if you own an expensive automobile, repair costs can
be high. This can also mean you end up paying a higher automobile premium.
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The Cover you Buy
When you purchase car
insurance, you select the cover you want and sometimes you can select different
excess values. The cover you select will have a bearing on the premium you will
pay. Comprehensive cover will be more expensive than third party only cover because
the insurance company will pay for accidental damage to your vehicle. Third party
cover does not include cover for your vehicle. The value of your vehicle will
also impact on the premium for comprehensive cover. The higher value car will
have a higher premium (see the paragraph above). The insurance company is assuming
more financial risk if you are involved in an accident or claim. If you have an
older car, you might want to consider buying the Third Party only cover. After
all, the automobile is probably not worth the additional premium cost.
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Work on your driving record
This is an easy, yet
effective way to bring down your insurance costs. Build a consistent accident
and claims free track record with an insurance company and you will see your premiums
reduce. Your Policy Sum Insured: Comprehensive Cover only: We encourage you to
review the policy sum insured each year if you have a comprehensive policy. As
you know, the sum insured is a factor that helps determine the premium. The rule
of thumb is that the current sum insured should represent the current replacement
value of that vehicle. This means that you need to consider the cost of the vehicle
as new at the time of renewing the policy and then take off the appropriate amount
of depreciation. General industry practice is a reduction of 15% for the first
year and then 10% each year thereafter. The resulting amount will represent the
approximate replacement value at that time. Please remember: if you have any special
treatments on the vehicle, paint job or details, or any interior accessories (sound
system) you need to add these items into the value you select. Our Make/Model
table in Motor E-surance site will assist you with a suggested insurable value
for a standard vehicle.
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Review your cover
If you have an old
car, it may not be worth having comprehensive cover at all.
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Take advantage of discounts
BF&M recognises the
Advanced Drivers Certificate and will offer a further 10% reduction in premium
to the successful participants of the course. For information on the course, call
295-8608 or 236-8489.
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Further Benefits of the BF&M Policy
Mature Motorist Discounts:
You can qualify for an additional 10% discount if you are between the ages of
35 and 65, have held a Bermuda drivers license for at least two years without
accidents and have had no convictions during the past five years.
The Mature Motorist benefit
offers the policyholder:
- Full replacement value
of the vehicle if the written off vehicle is less than a year old, plus an inflation
protection factor of up to 7% of the vehicle's value
- $10,000 personal injury
cover for the policyholder and their spouse.
Rental Car Cover: An option
Comprehensive Policyholders can elect.
Rental Car Cover (Collision Damage) insures the policyholder against any legal
liability they may have to the overseas rental company for (i) damage (collision
or malicious) to or (ii) theft of or (iii) loss of use of the rental vehicle.
This optional cover is extremely reasonable compared to the insurance you buy
from the rental company. Check the section in the motor Quote and Buy pages for
the different limits available and the cost of these higher limits.
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