Car physical insurance: Definition and 8+ important things to note

1. What is car physical insurance?

Car physical insurance is a type of voluntary insurance specifically for car owners, providing financial peace of mind when your vehicle unfortunately encounters risks. This is considered a "shield" to protect asset value against unwanted situations in life.

Specifically, this insurance will support you in the following cases:

• Traffic accident: Damage caused by collisions, overturns, or unexpected incidents during traffic are protected, helping to reduce the burden of repair.
• Natural disasters: Your vehicle will be supported with repair costs if it encounters situations such as storms, floods, lightning strikes, earthquakes and other harsh natural phenomena.
• Theft, robbery: In the unfortunate event of theft or robbery, insurance will help you minimize financial losses.
• Other unexpected risks: Fire, explosion or any unexpected incident are all covered, providing comprehensive protection.

2. Why should you buy car insurance?

Buying car insurance is not only a smart financial decision but also a way to comprehensively protect your vehicle and yourself against unwanted risks. Some reasons you should consider choosing this type of insurance are: 

• Asset protection: Cars are not only a means of transportation but also a highly valuable asset. Insurance helps you feel more secure when your car is always protected against unforeseen situations such as accidents, theft or natural disasters.
• Limit financial losses: When something goes wrong, the insurance company will pay part or all of the repair cost. This helps reduce the financial burden, especially since major repairs are often very expensive.
• Ensuring safety and convenience: In many cases, accompanying insurance services such as traffic rescue and repair support at the scene of the incident also bring convenience, helping you handle situations quickly and effectively.
• Comply with social responsibility: Owning insurance is not only protecting yourself but also showing responsibility to the community by contributing to minimizing the risks involved in accidents.

3. Cases covered by car physical insurance

According to current Vietnamese law, specific cases covered by car physical insurance are:

Cases covered:

Car physical insurance is designed to protect your assets in many unexpected situations such as: 

• Traffic accident: Losses caused by collisions, vehicle overturns, or sudden fires are all within the scope of insurance, giving you more peace of mind on every journey.
• Natural disasters: Harsh natural phenomena such as floods, storms, lightning strikes or earthquakes that cause damage to vehicles are supported with repair costs.
• Theft, robbery: In case the vehicle is completely stolen or important parts and components are lost, insurance will also compensate according to the level of damage.

Cases not covered:

Besides the outstanding benefits, car physical insurance also has some limitations that you need to keep in mind:

• Violating the law: If you use the vehicle to commit illegal acts or drive the vehicle in an unsafe condition, insurance will not pay.
• Misuse: Vehicles damaged due to use other than for the original registered purpose, such as carrying overloaded goods or participating in racing, will not be covered by insurance.
• Damage due to natural wear and tear: Damage arising from long-term use, such as aging of components or tire wear, is not within the scope of compensation.

4. Types of car physical insurance

Car physical insurance is divided into two main types, each type meets different protection needs depending on the level of damage the vehicle encounters. Here are details about each type:

4.1. Compensation for partial loss
This type of insurance applies to cases where the vehicle is partially damaged due to unexpected incidents such as collisions, natural disasters, or other risks during use.

• Insurance coverage: The insurance company will pay the cost of repairing or replacing damaged parts, helping the vehicle quickly return to normal operating condition.
• Application examples: Vehicles with scratched paint, broken headlights, or dented doors due to minor accidents are all covered by this insurance.

This is a suitable choice for car owners who often travel in crowded traffic environments, where small collisions can occur frequently.

4.2. Compensation for total loss
This type is designed to protect the vehicle in case of serious damage that cannot be repaired or the repair cost is too large, exceeding 75% of the actual value of the vehicle at the time of the incident.

• Insurance coverage: The insurance company will compensate the full value of the vehicle, depending on the agreement in the insurance contract.
• Application examples: The vehicle is completely burned out, the vehicle is swept away by a flood, or there is a serious accident that leads to irreparable damage.

Total loss compensation is suitable for high-value vehicles or car owners who want to ensure financial security against major unexpected risks.

5. Cost of insurance car quality

Car insurance premiums are usually calculated based on the vehicle value and factors such as vehicle type, vehicle age, and area of ​​use. This fee can range from 1-3% of the vehicle value depending on the insurance unit. 

To get detailed advice and receive an accurate quote, you can contact SeABank for more information about suitable car insurance packages.

6. Car physical insurance compensation limit

Car physical insurance compensation limits are given based on the provisions of law:

6.1. Insurance compensation level

The compensation level for car physical insurance depends on many factors and does not have a fixed number. 

• Part damage: If the car is only damaged in a few parts (for example: dented, broken lights...), insurance will cover the cost of repairing or replacing those parts. Compensation will be based on the actual value of the repair/replacement.
• Total damage: If the vehicle is damaged so severely that it cannot be repaired or the repair cost exceeds a certain percentage (usually 75-80% of the vehicle's value), insurance will compensate the entire vehicle value according to the market value at the time of the accident (after deducting depreciation).

Car value: The value of the vehicle at the time of purchasing insurance and the remaining value of the vehicle at the time of the incident will affect the level of compensation. The newer and higher the value of the vehicle, the greater the (maximum) compensation level.

Deduction level (normal exemption level): This is the amount of money you have to pay yourself in each loss. For example, if the deductible is 1 million VND and the repair cost is 5 million VND, the insurance will pay 4 million VND. The higher the deductible, the lower the premium will typically be.

Repair options: Some insurance policies allow you to choose a repair garage. If you choose a garage that is not on the insurance company's affiliated list, there may be limits on the amount of compensation.

For example:

Your car was involved in a collision, causing dented doors and broken lights. Repair cost is 10 million VND. Your insurance contract has a deductible of 500,000 VND. So, the compensation you receive will be 9,500,000 VND.

6.2. Depreciation in car physical insurance

Depreciation is the rate at which the value of vehicle parts decreases over time. When damage occurs, the insurance company will apply depreciation to determine the remaining value of the spare parts.

Depreciation scope

For popular vehicles:

• Vehicles with a value of 85% or more or vehicles used for less than 03 years are not subject to depreciation;
• Vehicles with a value from 70% to less than 85% or vehicles that have been used for 03 years to less than 06 years are subject to 15% usage depreciation;
• Vehicles with a value of more than 50% to less than 70% or vehicles that have been used for 6 years to less than 10 years are subject to 25% depreciation;
• Vehicles used from 10 to 15 years are depreciated at 35%;
• Vehicles used over 15 years are subject to 50% depreciation;
• Older vehicles often have higher depreciation rates, reflecting a decrease in value over time.

For vehicles such as tractors, taxis, self-driving rental cars, and inter-provincial passenger cars.

For these types of vehicles, the depreciation rate for all parts is 150% compared to the depreciation rates for common vehicles in section I above. For vehicles used from 1 year to 3 years, 15% depreciation applies. For vehicles used less than 1 year, depreciation is not calculated.

Note:

• Understanding compensation and depreciation policies helps you optimize your benefits when using insurance.
• Details and application levels may vary depending on each insurance company, so you should carefully read the contract and consult directly with the insurance provider before purchasing.

7. Experience in buying car insurance

Buying car insurance is a good thing to do to protect assets and minimize financial risks. Here are some experiences to help you choose the right insurance:

• Choose a reputable insurance company: When choosing an insurance company, make sure you choose brands that are well-known in the market, have a long operating history and are trusted by many customers. A reputable company will help you feel secure about the quality of service and ability to pay when necessary.
• Compare insurance packages: Before deciding to buy insurance, compare many different insurance packages. Make sure the price you pay is commensurate with the benefits you receive. You should choose an insurance package with a wide range of protection, including unforeseen risks such as natural disasters or theft.
• Read the insurance contract carefully: Before signing, carefully read the terms of the insurance contract, especially the exclusion clauses and compensation benefits. This helps you avoid unnecessary trouble when problems occur.
• Prioritize 24/7 support service: Choose an insurance company with 24/7 customer support service, helping you quickly solve problems when you encounter problems, from claiming compensation to problems that arise during vehicle protection.

8. Buy physical car insurance at SeABank

SeABank cooperates with insurance units to provide many car insurance packages outstanding benefits, giving you peace of mind on every trip:

• Competitive insurance premiums: Ensures high protection value but reasonable fees, suitable for many customers.
• Customer care service system covers the whole country: With 24/7 customer support service, SeABank ensures to help you quickly resolve all insurance-related issues, regardless of time and place.

With attractive benefits and quality services, car insurance at SeABank is definitely the ideal choice to protect your car from any unwanted risks. 

9. Frequently asked questions

When learning about car insurance, customers often ask the following questions:

1. How long is the car insurance period?
Car insurance has a minimum term of 1 year and a maximum of 3 years. You can choose the insurance period that suits your needs and financial capacity.

2. Is car insurance mandatory?
Car physical insurance is not mandatory insurance. This is a type of voluntary insurance that helps car owners protect their assets against unexpected risks such as accidents, natural disasters, or theft.

It can be concluded that car insurance is a wise decision to help protect valuable assets and minimize financial risks for car owners. We hope that the above article has helped you better understand this important type of insurance and make the right choice. If you need more advice about car insurance, you can go to SeABank branches nationwide or call the hotline to get advice and answers from staff.

Southeast Asia Commercial Joint Stock Bank SeABank

• Address: BRG Building, 198 Tran Quang Khai, Ly Thai To Ward, Hoan Kiem District, Hanoi 
• Call Center: KHCN 1900 555 587/(024) 39448702 – KHDN 1900 599 952/ 024-32045952
• Customer care email: contact@seabank.com.vn