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All you need to know about financial loss cover
When you buy or lease a car, you take out car insurance that covers you in the event of problems with your vehicle. However, depending on the case, there is a risk that you may not receive full reimbursement for your vehicle. This is problematic in all cases, but particularly so for motorists who have taken out a bank loan, or those on a long-term contract.
What is the financial guarantee?
In fact, you could find yourself in the following situation: your vehicle is too badly damaged to be of any use to you, yet you continue to pay your installments. Inevitably, you lose money.
This is where financial loss cover comes into its own. This cover , included in your car insurance, takes care of your reimbursements if your vehicle is out of action. In this way, financial loss cover protects the policyholder from being penalized in this situation.
Note: with Beev, financial loss coverage is directly integrated into your long-term leasing package!
Financial loss cover offers services equivalent to those of replacement value cover. However, you can choose to take out either one or the other. The main difference is that financial loss cover has been specially developed for long-term leased vehicles!
Financial loss cover: the difference between the estimated price of your vehicle at the time of the claim and what you have to pay back.
Replacement cost coverage: the difference between the original price of the vehicle and the estimated price at the time of the claim.
When does it come into play?
As with all car insurance, reimbursement conditions depend on your contract. Nevertheless, in most cases, theft, natural disasters, fire, road accidents... are covered by the financial loss guarantee.
This guarantee acts as protection when your vehicle is out of use, and prevents you from continuing to pay your lease payments when you can't use your car!
Setting the scene
To understand more clearly how this warranty works, let's take a fictitious situation with the Tesla Model 3.
Today, you buy your Tesla Model 3 for €53,490, but a claim occurs. An expert's estimate of the vehicle's value comes to €50,000, a difference of €3,490. As a result, the claimant will not only have to continue paying his reimbursements, but also the €3,490 corresponding to the difference between the vehicle's initial value and the amount reimbursed by the insurer.
Good to know: with Beev, you can take advantage of your Tesla Model 3 Propulsion lease from €598/month with no deposit!
Other cover available in the event of a claim
Between compulsory and optional cover, it's easy to get lost. That's why we've compiled a list of benefits that you must take out, and those that are worth considering!
Which car warranties are compulsory?
Motorists are required to take out automobile insurance. There are three types:
- simple third-party insurance,
- extended third-party insurance,
- all-risk insurance.
Simple third-party insurance is the compulsory minimum and the cheapest option, covering only the physical damage you are likely to cause to others. For the extended alternative, it also covers certain losses such as theft, glass breakage, etc.
Finally, the aptly-named all-risk cover insures you against any damage you may cause, as well as any damage you may suffer. Obviously, this is the most expensive option.
Vehicle sellers (professional or private) are subject to the legal warranty of conformity and hidden defects. This protects you against defects in conformity and hidden defects in your vehicle.
Note that these guarantees are required by law!
The legal warranty of conformity applies in particular when your car does not conform to the description made of it, is out of order, or does not have the characteristics described before purchase.
The legal warranty for latent defects is also based on the notion of conformity. However, in this case, the seller has voluntarily and knowingly offered a vehicle that does not conform (mileage problem, scratches, etc.).
Damage warranties
Damage cover is not compulsory, but depending on your needs, it may be worthwhile taking out one or more of them. There are many types of cover, so for the sake of clarity, we've listed each one for you, with a brief explanation. Here are the property and casualty cover options available to you:
- all-risk damage: we cover all damage to your vehicle.
- collision damage: you will be compensated if you collide with another vehicle.
- fire and theft: if your vehicle is damaged by fire or theft, you will receive compensation. For more details on how this reimbursement is calculated, please visit the public service website.
- glass breakage: compensation for damage to your glass components.
- storm: compensation in the event of a storm.
- natural disasters: compensation for material damage caused by natural disasters (floods, avalanches, etc.).
- technological disaster: this concerns damage caused by industrial vehicles.
- damage suffered by the driver of the vehicle: if you are the victim of an accident, you will be compensated thanks to this special coverage.
- vehicle contents" cover: you will be compensated in the event of damage to or disappearance of items in your vehicle.
- service guarantee: accessory guarantees (breakdown assistance, legal protection, etc.)
Beev 's advice: all-risk coverage covers all types of damage such as glass breakage, fire, theft... so this option should be favored, both practically and financially.
Supplementary warranties related to damage warranties
The warranties listed below are often those offered by the seller of the car, and are neither compulsory for you, nor you for the seller. However, they are still very advantageous, because if you benefit from them, you are not necessarily obliged to take out other warranties like those listed above.
- contractual warranty: specific to each brand, this warranty commits the seller to the purchaser of the vehicle. It is not compulsory, but proves the goodwill of the seller.
- manufacturer's warranty: covers defects before and after use of your vehicle (as opposed to the legal warranty, which covers defects before and not after use of the vehicle), relating to mechanical faults...
- commercial warranty: this warranty also covers problems that arise after your vehicle has been in use. The difference with this option is that it covers the entire vehicle, whereas the contractual warranty excludes wearing parts. With this warranty, you can obtain reimbursement of the purchase price, replacement of the vehicle, or repair.
- mechanical warranty: as the name suggests, you'll be reimbursed for the cost of repairing any technical problems with your vehicle. This warranty is not interesting if you're buying a new vehicle, as you'll already have the manufacturer's warranty, which covers mechanical breakdowns.
Possibility of extending your warranty: this option is generally subject to a charge and a mileage limit. Depending on your needs, you can choose between extending your warranty or taking out a new one.
Summary table of compulsory and optional coverages
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Mandatory warranties |
Optional warranties |
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For professionals :
- Renault Megane e-tech for €484/month, 49 months, 10,000 km/year (€4,000 down payment),
- Tesla Model Y Long Range for €733/month, 49 months, 10,000 km/year (€2,000 deposit),
- Kia Niro EV for €457/month, 49 months, 10,000 km/year (€4,000 down payment),
- Mercedes EQA for €649/month, 49 months, 10,000 km/year (€2,000 deposit),
- Hyundai Kona 64 kWh for €435/month, 49 months, 10,000 km/year (€4,000 down payment).
Private customers :
- Renault Megane e-tech for €538/month, 49 months, 10,000 km/year,
- Tesla Model 3 for €638/month, 49 months, 10,000 km/year,
- Tesla Model Y for €677/month, 49 months, 10,000 km/year,
- Kia Niro EV for €442/month, 49 months, 10,000 km/year.
All these vehicles are available with no down payment and no additional first rental charge!
Key points to remember
Financial loss cover is a particularly advantageous solution, especially when leasing, so think about it!
What's more, you also have the opportunity to take out additional coverages to suit your particular needs!
Let us know what you think of these solutions, and we'll be delighted to hear from you!
