We can now tick off another task from our seemingly endless to-do list as new expats in Europe. Benjamin, our insurance agent from Helvetia, came to our house and helped us get car insurance in Switzerland for the new, used VW we just bought. During the two hour appointment at our house, he thoroughly explained how Swiss car insurance works, the rates, and what the options are for additional coverage. Before he left, we signed a policy for the next year with the expectation we’ll receive a bill in the next few weeks. Needless to say, even car insurance in Switzerland is quite different than in the States.
Car Insurance in the US
For starters, it’s really expensive in Switzerland. No surprise, huh? In the US, we paid about $65 per month for my older Mazda Miata and Trav’s Toyota 4Runner. Both were covered by Liability and Collision insurance. Over the 7 or 8 years we had both rigs, the cost of our insurance changed very little, despite living in different states. We both have clean driving records, a multiple car discount, and in Oregon, had an additional discount for having our home insurance on the same policy. Because the Miata was terrible in the snow and heavy rain, we dropped the insurance during the winter months and garaged it to save money. But our average annual premiums to have them both fully covered year-round cost us about $625.
Car Insurance in Switzerland
In Switzerland, the base rate for new drivers is astronomical in comparison, but rates drop drastically the longer you’ve been driving, particularly if you haven’t had accidents. For example, the base rate on our estimate with our VW’s info (original price of 37,080 chf new in 2002, purchase price of 4300 chf, fuel consumption of 6.4 l/100 km, 173 g/km of CO2) was 1363 chf per year.
That’s a lot of money, folks. (As of this writing, the Swiss franc and US dollar are roughly equivalent.) However, a discount is applied for every year someone drives after getting their license.
Benjamin drew a chart showing rates dropping by as much as 10% per year every year until they “bottom out” at 35% of the original rate. That’s a huge discount! Since both of us have had our driver’s licenses for over 15 years and have never had any kind of accident, this discount was applied, bringing our base insurance down to 477 chf per year.
Hallelujah, Switzerland – and thank you.
Not only that, but you’re allowed one accident per year without having it increase your insurance rates. The “year” for this runs from September 1st through August 31st, so if you have an accident on August 25th and another one on September 5th, your rates still won’t go up.
Switzerland offers better discounts for experienced drivers, is slower to increase rates after an accident, and has a better system in place to minimize uninsured drivers. Even though car insurance is mandatory in most US states, driving without it is easy to get away with, so accidents with uninsured drivers are rampant. This phenomenon in Switzerland is far less common, in large part because you can’t even get license plates for your car until you provide proof of insurance to the registration office. If you provide “proof” but don’t follow through with the insurance company, they simply report you to the police, who then track down your vehicle. You can guess how things go from there.
Before you decide to move to Switzerland just for cheaper car insurance rates though, consider this. 477 chf might sound great, and it is, but this is just the minimum car insurance coverage mandated by Swiss law. Referred to as responsabilité civile, this is Liability that covers damage and bodily injury if a third party is involved.
So what about Comprehensive insurance?
We declined it. Much to Benjamin’s credit, he ran down the numbers and advised us that it’s not cost effective for most drivers unless the car has very high value or is less than 5 years old. Because we paid cash for the VW and now own it outright, it’s not mandatory for us to carry Comprehensive. If we had leased the car or taken out a loan, we might have been obligated to have it.
Instead, for 197 chf per year (329 chf base rate prior to discount), we added casco partielle, partial coverage, which has no deductible (how’s that possible?!) and covers your typical acts of God and the occasional damage by fouine, or weasel. These adorable little buggers apparently love life in Switzerland, where they tend to nest in cars, often chewing things that ought not be chewed. In fact, we’re pretty sure a small family made themselves at home in our attic last summer, thumping from one end of the house to another in the wee hours of the morning.
Benjamin also asked us if we’d heard about the new driving law in Switzerland with reference to committing a faute grave, or serious offense. We hadn’t. We opted to buy this coverage for 20 chf per year in case we commit one of these serious offenses (which could be speeding excessively or committing a traffic infraction) and it leads to an accident. Considering we still haven’t quite figured out the rules of the double round-abouts here and will be driving all over Europe, we thought this might be prudent.
One final insurance rider we added was for roadside assistance, which we’ve never bought before. Because it was cheaper to add it to our renter’s insurance, though, Benjamin added the 60 chf/year policy to that instead of our car insurance policy. Now, if we break down in Rome at 6 pm, we have 24 hour assistance for a tow to a garage (even back to Switzerland if necessary), a hotel, a rental car, and an interpreter if we need it – just about whatever it takes to get our car fixed and get us home. Uh-mazing. Pretty sure AAA can’t top this, and certainly not for 60 bucks a year.
After tallying it all up, our total annual insurance will be about 740 chf. This includes additional taxes and a mandatory fee to cover the few uninsured drivers, which for us was only 3.60 chf/year. Without the discounts, the cost would have been about 1,715 chf for the year.
We now have medical insurance, accident insurance, renter’s insurance, and car insurance, all of which are mandatory here. Though it all tends to be expensive and was a bit of a process to get straightened out, I have to admit being so heavily insured brings a rare piece of mind. I feel like we’re living under a white, puffy cloud with its own magical rainbow.