With compulsory motor third-party liability insurance (MTPL), everyone knows the B10 and M04 classes. Casco (comprehensive motor insurance) has a bonus too – it just is not the same system, and that is exactly where the misunderstandings come from: “I'll lose my bonus if I switch”, “glass damage also moves me down a class”, “my MTPL bonus applies to casco too”. As a broker, I see in premium comparisons that the bonus class often weighs more heavily in the premium than a step in the deductible – and that the recognition of claim-free years when switching typically depends on a single document. This article explains how the casco bonus works: how it differs from the MTPL one, what happens after a claim, and what to do if you switch insurer – without premium figures, because those will be in your own quote.
- The bonus-malus system of compulsory motor third-party liability insurance (MTPL) is made uniform by law (NGM Decree 21/2011); the casco bonus, by contrast, is each insurer's own no-claims discount set out in its policy conditions – there is no central register, and the system differs from company to company.
- After a claim, your bonus class typically worsens from the next renewal date, and it is worsened only by a payout that the policy conditions classify as “bonus-affecting” – under some conditions, for example, glass damage is not; how many levels a claim costs you is also stated in the policy conditions.
- When you switch, the claim-free period can typically be carried over with a claims-record certificate from the previous insurer, but the new insurer places you in its own table, and the conditions for recognising a bonus brought over (an uninterrupted period, the reason the previous policy ended, a deadline) differ from company to company.
How does the casco bonus differ from MTPL bonus-malus?
The bonus-malus system of compulsory MTPL insurance is regulated by NGM Decree 21/2011 (VI. 10.) (NGM: Ministry for National Economy): the bonus-malus classes, the recognition of claim-free years and the issuing of claims-history certificates are uniform across all insurers, the classification follows the keeper of the vehicle, and claims-history data can be checked in a central register. For casco there is no such legislation. Casco is voluntary property insurance, and the bonus is part of the insurer's own pricing: policy conditions call it a no-claims discount, a bonus or a bonus-malus system, and each company builds it according to its own logic. Among the factors that determine the casco premium, this is the one determined not by the car but by your claims history.
Two Hungarian sets of policy conditions are good examples of how much practice varies. One distinguishes ten bonus classes (C00–C09) and three malus classes (M01–M03), and assigns premium multipliers of between 1.05 and 1.20 to the malus classes – so there, a poor claims history means a premium surcharge. Another set of conditions – in the 2014 edition of its rules – gave a premium discount of between 5 and 50 per cent according to the number of claim-free years, from one year to ten or more; the level and form of the discount may also change from edition to edition, so it is the conditions of your own contract that apply in every case. The same word, two completely different mechanisms – which is why a bonus class cannot be “converted” between insurers the way we are used to with MTPL.
What happens to your bonus class after a claim?
The common logic: the bonus rewards a claim-free period, so a claim that is paid out worsens it. The details, however, are in the policy conditions, and there are three questions worth looking for in them. The first: which claims count? Policy conditions typically take into account only “bonus-affecting” payouts; with several companies, glass damage, the use of assistance services or a claim paid solely under an add-on cover does not worsen the bonus class – but this differs from one set of conditions to another and cannot be stated categorically for any insurer. The article on the specifics of glass damage looks at this question separately. The second: from when? Under one of the sets of conditions mentioned, if a bonus-affecting payout was made in the policy year, the class changes from the next renewal date – that is, the year of the claim still runs at the old premium, and the difference comes in the following year. The third: by how much? Under the other set of conditions mentioned, the bonus level drops by four after one claim and by eight after two claims, and with three or more claims the bonus is lost. Other insurers use different steps.
This leads to a practical calculation for a small claim: if the amount of the damage is around the level of the deductible, typically little is left after claiming, while your bonus class may worsen for several years. In such cases the question is not “will the insurer pay?” but whether it is worth claiming at all. Some companies, in their policy conditions or in practice, allow the policyholder to keep their bonus class by repaying the amount paid out on the claim – whether your contract offers this is something you need to ask the insurer. The combined effect of the deductible and the bonus is worth thinking through along the lines of the article on choosing a deductible. One thing you should not do, however: do not hide the damage itself from the insurer if it could later come to light in another claim or during an inspection – you can decide whether to pursue the claim, but not whether to be honest in what you disclose.
Can the bonus be carried over when you switch insurer?
Typically yes, but not automatically, and not necessarily into the same level. There is no central casco claims-history register, so the new insurer accepts what you can prove: the claims-record certificate issued by the previous insurer on the claim-free period. One Hungarian set of conditions states that the policyholder proves an uninterrupted claim-free period of a specified length with a document from the previous insurer; according to another insurer's FAQ, the bonus earned on the basis of claim-free years can be carried over for one year if the product allows it, and only if the previous contract ended because of sale, permanent deregistration, destruction, non-payment of the premium or cancellation at the renewal date. Three lessons: the claim-free period should be uninterrupted (a year without cover can also break the bonus), the reason for termination matters, and the certificate has to be obtained in time.
In a premium comparison, the bonus class is therefore an input: if the quote request does not include the number of claim-free years and the certificate, the new quote is prepared with the entry-level class, and in the end you do not get what you compared. That is why it is worth adding these to the steps in the article describing the process of switching casco: requesting the claims-record certificate from the old insurer, submitting it to the new one, and then checking the bonus class on the policy.
What should you do in practice?
- When taking out the policy, ask about five things: whether there is a bonus system; which claims worsen it; by how many levels and from when; whether they accept another insurer's certificate; what is needed for this and by when.
- At renewal, check the bonus class on the premium notice – this notice is sent by the insurer; if it does not match your claims history, ask for a correction in writing.
- With a small claim, do the calculation: the payout left after the deductible versus a bonus class that worsens for several years – and ask whether there is an option to repay the claim.
- Before switching, request the claims-record certificate, and make sure the reason for termination is in order by cancelling in the proper way.
- Policy check: the bonus class on the new policy should be the one expected on the basis of the certificate.
If you let me know before the renewal date, I prepare the comparison with your bonus class taken into account, and I prepare the paperwork needed for the certificate – cancelling and providing the information remain your responsibility, and the renewal notice is sent by the insurer. In a claim, the primary route for reporting is the insurer's claims line; if a dispute arises over the bonus class, I help where I can.
Have a question specific to your own bonus class? book a free 20-minute consultation →
Sources
- NGM Decree 21/2011 (VI. 10.) – the MTPL bonus-malus system, classification, claims-history certificate
- Generali – Special conditions for casco insurance of vehicles (JCKF29), Chapter X: bonus-malus classes, downgrading, certificate from the previous insurer
- UNIQA – Multi Casco Plus motor insurance rules (edition of 1 January 2014 – point 11 of the edition in force from 23 September 2022 covers downgrading and the recognition of a bonus earned with another insurer in the same way, without a percentage table), point 11: bonus levels, downgrading after a claim, certificate from the previous insurer
- Alfa Biztosító – Frequently asked questions, casco (transferring the bonus, claims-record certificate)
- UNIQA – Multi Casco Plus conditions (from 23 September 2022), points 11 and 11.2: bonus levels, downgrading after a claim, bonus earned with another insurer
