The bonus-malus system is a key mechanism in the world of auto insurance. It adjusts the insurance premium based on the driver’s behavior, rewarding good practices and penalizing the less cautious.
Overview of the bonus-malus system
The bonus-malus, or reduction-increase coefficient (CRM), is a system that adjusts the auto insurance premium based on the driver’s behavior. For each reference period of a year without a responsible claim, the driver benefits from a reduction in their premium. Conversely, a responsible accident leads to an increase in the coefficient, and thus an increase in the premium.
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History of the system
Implemented in France in the 1970s, the bonus-malus was designed to encourage drivers to adopt cautious driving. Over the decades, it has become an essential tool for insurers, allowing them to personalize premiums based on the risk profiles of the insured.
Objectives of the bonus-malus
The main objective is to encourage responsible driving by rewarding drivers who avoid claims. This system also allows insurers to manage risk more effectively by adjusting premiums based on each driver’s history.
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Calculation of the bonus-malus coefficient
The initial coefficient
Every new driver starts with a coefficient of 1. This means that the insurance premium is calculated without any increase or reduction. Each year without a responsible claim results in a 5% reduction of this coefficient, thus lowering the premium.
Criteria influencing the calculation
The calculation of the bonus-malus primarily relies on the responsibility for accidents. A responsible accident for the driver results in a 25% increase in the coefficient. Aggravating circumstances, such as driving under the influence or license suspension, can also affect the malus.
Example of coefficient calculation
| Year | Responsible claim | Bonus-malus coefficient |
|---|---|---|
| 1st year without a claim | No | 0.95 |
| 2nd year without a claim | No | 0.90 |
| 3rd year with a claim | Yes | 1.125 |
Impact of claims on the bonus-malus
Types of accidents and their repercussions
Not all claims are equal in the eyes of insurers. A responsible accident for the driver impacts the coefficient differently than a non-responsible claim. Non-responsible claims generally do not affect the bonus-malus coefficient.
Driver responsibility and malus
A claim where the driver’s responsibility is established will lead to an increase in the coefficient. This results in a higher premium when renewing the auto insurance contract.
Case of non-responsible claims
Non-responsible claims, meaning those where the driver is not deemed at fault, do not affect the bonus-malus. This encourages drivers to be vigilant, even when they cannot control all aspects of their driving environment.
Consequences on the insurance premium
Reduction of the premium thanks to the bonus
Having a good bonus allows for a significant reduction in the insurance premium. After several years without a responsible claim, a driver can reach a maximum bonus, thus reducing their auto insurance costs.
Increase in the premium in case of malus
Conversely, a malus can notably increase the premium. A responsible accident results in a 25% increase in the coefficient. Multiple accidents during the same reference period can quickly raise the costs for the driver.
Options to keep the bonus despite an accident
Some auto insurances offer options that allow drivers to preserve their bonus, even after a first responsible accident. These options, often at an additional cost, provide peace of mind for cautious drivers who are concerned about unforeseen events.
By understanding how the bonus-malus works, drivers can better manage their auto insurance contract and optimize their premiums. Caution and responsibility behind the wheel remain the best allies for benefiting from a reduced insurance premium and a calm driving experience.