Yuriy Ostrovsky  

CASCO Insurance Policy: How to Use it Wisely

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When making a decision to purchase CASCO insurance policy it’s worth remembering that it serves as the means of protecting your vehicle from almost all kinds of unforeseen circumstances. Sometimes even those which an Insured can’t imagine. It’s not reasonable to evaluate whether or not CASCO insurance is worth paying for based on the relation between the insurance premium paid and indemnity received during the term of the agreement. Insurance allows predicting your expenses, including unexpected ones, in the first place. That’s the core purpose of such kind of insurance.

In most cases CASCO insurance policy is intended to cover the sudden and unforeseen damage done to a vehicle. Traffic accident, malicious mischief and theft are the most frequent occurrences. Not everyone knows that acts of God, fallen objects or animals’ attack also fall into the category of insured perils. From this point of view CASCO policy can once prove to be a godsend.

Speaking about corporate vehicles, CASCO insurance policy has long ago become the irreplaceable tool for protecting the business from unexpected expenses. Normally the total insurance premium paid for the corporate fleet of vehicles exceeds the total indemnity paid during the term of the agreement. In this regard insurance is more profitable for insurance company. Which is absolutely reasonable or else there would have been no institute of insurance at all.  However there are some exceptions to this rule. CASCO insurance purchase is usually a planned expense equal to 2-5 % of the vehicle’s value. This is much more reasonable than to deal with constant unforeseen repair of the vehicles and to spend thousands of UAH on it. Buying CASCO is equal to buying stability and avoiding unexpected expenses.

As to the individuals, not having CASCO insurance policy is also associated with major risk of paying for the major damage themselves even if they have no prior history of vehicle damage at all. That’s the vivid example of Murphy’s Law. Let me tell you my own story. Due to the circumstances my car was not covered by insurance for one single night right at the time when I spent it in a rough part of a resort town. Though it was supposed to be my vacation, that night I did not get any sleep at all worrying about the safety of my vehicle. Is saving on insurance really worth having such nights?

Speaking about expert drivers, some are confident that should a traffic accident take place, that would be due to the fault of another driver. Meaning that the repair will be paid by the insurance company holding another driver’s third party liability insurance policy. Generally that would most probably be the case. However there are some nuances such as:

  • you can’t be 100 % sure in the solvency of the faulty party’s insurers or in the fact that he is insured at all;
  • indemnity under motor third-party liability insurance policy is more time-consuming and requires submitting more documents;
  • indemnity is always adjusted for the wear and tear of the spare parts;
On top of it all, you can count on the MTPL insurance to cover only traffic accidents due to the fault of another driver.
On top of it all, you can count on the MTPL insurance to cover only traffic accidents due to the fault of another driver. This means that all the other occurrences mentioned in the beginning of the article, are not covered at all.

In the view of the above the following conclusion comes to mind: CASCO insurance is not indented to be profitable. What it guarantees, though, is security and confidence in what tomorrow brings. 


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