Additional follow-up and loss prevention costs
The additional costs directly generated by a claims event. They can include: emergency doors, locks, windows and other security measures, temporary housing solutions, removal and disposal of debris.
The malus will not be applied for one claim per observation period thanks to this extended motor vehicle coverage that should always be included in the protection plan. Further bonus protection can be applied by some providers if the policyholder accepts to use their recognized partner for repairs or for other incentive plans.
Deductible or “excess”
The deductible or “excess” is the amount the insurance policy holder will pay out of pocket before the insurance company starts to refund the claim. The deductible can be applied per claim or per calendar year depending on the type of insurance. The lower the deductible the higher the insurance premium, as a low deductible costs the insurance company more when a claim is made.
The obligation to observe the basic principles of security or care that can be expected of any reasonable person in the same situation and circumstances.
Average costs of health care in Switzerland
General practitioner: CHF 150 to 300 per visit.
Emergency: CHF 200.- to 350.- per visit
Specialist: CHF 250.- to 400.- per visit
Gynaecologist: CHF 200.- to 400.-
Inpatient (hospitalisation): CHF 2500.- to 5000.- per night
Average medical expenses per year for a man in good health in Switzerland: CHF 750.-
Average medical expenses per year for a woman in good health in Switzerland: CHF 950.-
High value items insurance
In the standard personal belongings insurance package your personal belongings are only protected in your home in case of damage caused by fire, water or a natural event and burglary. A valuable piece of jewellery or a watch is worn all over the world and can be lost, stolen or broken anywhere. The personal belongings insurance will not protect it. High value item insurance is a worldwide protection that covers for loss, damage and theft, also known as all risk insurance.
If you renovate your home or add value to your property when you build it by a change of floor (marble, improved parquet…), improving the kitchen or bathrooms or by adding roof windows etc it will increase the value of your property stated on the original sales contract. The cost of these home improvements must be added to the insured amount on your insurance policy for them to be taken into consideration in the event of a claim.
LAA is the acronym of the French term, Loi sur l’Assurance Accident (Accident insurance law). All employees who work more than 8 hours per week for the same employer benefit from full accident insurance partially financed by their employer. No deductible or participation applies to LAA accident medical care.
LAMal is the acronym of the French term Loi sur l’Assurance Maladie (health insurance law). It is the law which governs the obligatory universal Swiss health insurance plan.
On top of the LAMal deductible all patients must pay 10% of their medical expenses up to a CHF 7’000.- limit for adults and 3’500.-* for children.
LCA is the acronym of the French term, Loi sur le Contrat d’Assurance (Insurance contract law). It is the law which governs the Swiss supplementary health insurance plans.
Active legal protection
Protects, advises and defends the policyholder if they wish to make a civil liability claim against a third party.
Passive legal protection
Protects, advises and defends the policyholder in the event of an unfounded civil liability claim against them.
Location, exposal and disposal costs
Only related to water related events (water, gas or heating oil and damage caused by frozen and burst pipes). Leaks must be located, exposed, repaired and the waste disposed of.
Lump sum insurance
The amount is capped at the amount mentioned on the insurance policy.
The malus system penalizes claims made by the policyholder for which he or she is responsible (at-fault accidents) by a premium surcharge or increase of 20% the full year after the claim is made. If the no claims bonus is at 5% per year it will take the policyholder 5 years to get back to the initial premium after an at-fault accident. This is known as the bonus-malus system (BMS).
Each liability, partial or full casco module is penalized separately, so to calculate the precise impact on the yearly premium one must apply the malus to the relevant module.
No claims bonus
Each year that a policyholder does not make a claim the insurance company rewards them with a discount or bonus of, on average, 5%. This means that their yearly premium will decrease each year until they get to the maximum no claims bonus which is generally around 35% of the full yearly premium. This is known as the bonus-malus system (BMS). Each liability, partial or full casco module is rewarded separately, so to calculate the precise impact on the yearly premium one must apply the bonus to the relevant module.
The 12-month period chosen by the insurance company to evaluate the degree of the no claims bonus as of January 1 of each year as per the bonus-malus system (BMS). As the premium must be calculated for a calendar year the observation period is almost never from January to December, each company is free to choose the 12 month period they prefer.
Parking damage is damage done to a stationary parked car by an unknown third party. If the third party is known it is their liability insurance that will compensate the damage.
Personal belongings inventory
The personal belongings inventory should reflect the amount required to replace all of one’s personal belongings in case of loss or destruction by one of the four events covered, including clothes, furniture, valuables, leisure items, electronics… This amount is defined by the policyholder and will only be checked by the insurance company if a claim is made.
Personal liability insurance
Personal liability insurance provides the policyholder and their family with protection in the event of negligence towards a third party that results in physical or psychological harm or material damage. It also offers passive legal protection, which defends the policyholder in the event of an unfounded liability claim.
Social security scheme (AVS), this module is guaranteed by the state. It includes pension, loss of income and death benefits. All Swiss residents must contribute to the pillar 1 module for 44 years from 21 to 65 years old (64 for women)* or as soon as they receive an AVS salary. To qualify for the full pension of CHF 2’370.-* per month the beneficiary must have contributed for the complete 44 year period and to have earned at least CHF 3’754’080.-* over that same period (or an average of CHF 85’320.-* per year).
Professional pension scheme (LPP), this module is guaranteed by the employers’ pension fund. It includes additional pension, loss of income and death benefits as well as accident (LAA) and optional illness related (PGM) loss of income benefits for 720 days. The obligatory savings plan the employee must contribute to runs for a 40 year period from 25 to 65 years old; in this obligatory plan the capital accumulated corresponds to 12.5% (the average percentage over the period) of earnings over the 40 year period, plus compound interest.
Private pension scheme (3a and 3b), this module can only be guaranteed by a personal savings plan that can include loss of income and death benefits (life insurance). The pillar 3 module is designed to guaranty a comfortable standard of living at retirement. Pillar 3 is an integral part of the Swiss pension system, so the government offers large tax incentives to all private pension schemes. A private pension scheme with loss of income and death benefits can be subscribed to through an insurance company as soon as the beneficiary receives an AVS salary (pillar 3A) or when desired or required (pillar 3B).
Private loss of income scheme limited to residents who contribute to a professional pension plan (pillar 2) and in which the end of the insurance contract must be within 5 years of the legal age of retirement.
The yearly investment is tax deductible and can generate a tax saving of between 15 to 30% of the amount paid into the scheme.
Private loss of income scheme with no restrictions on the end of the contract, professional status and age. Tax benefits for 3B insurance contracts are applied in the Canton of Geneva, but not the Canton of Vaud (or in most of the other Swiss Cantons).
Fine art is exposed to multiple risks from the moment it is purchased. It must be packaged and transported to its final destination (wall to wall) when it leaves the dealer’s gallery. Provisional coverage will cover those risks for a period of 30 to 90 days giving the policy holder the time to declare it to the insurance company for complete protection. IMPORTANT: An existing insurance policy must be in place for provisional coverage to kick-in, and the amount insured will be limited to roughly 20% of the agreed value of this existing contract. Serious provider’s will include this protection.
Swiss federal stamp duty
A stamp duty due on all Swiss insurance policies; the rate at publishing was 5%.
Three pillar pension system
The Swiss pension system is known to be one of the best in the world. It is divided into three modules managed by the state, the employer and privately, it is referred to as the three “pillar” pension system or “trois piliers” in French.
The insured vehicle is deemed a total loss when the cost of reparation exceeds its current value or if the vehicle is stolen and not found within 30 days. With the current value supplement the insured vehicle is deemed a total loss in its first two years when the cost of reparation exceeds 65% of the catalogue price.
Underinsurance is the act of under estimating the true value of the risk to be insured.
This results in a lower annual insurance premium but will also result in the equivalent loss when a claim is made (“apply average” in insurance terminology).
An example illustrates that the loss occurred from a claim can greatly exceed the saving on the insurance premium.
If the policyholder underestimates the value to be insured by 50% they will be penalized by the same amount (50%) if they make a claim:
Value declared: 20’000.- / real value 40’000 (underinsurance value 50%)
Claim amount / damage: 10’000.-
Compensation: 5’000.- (-50%)
To insure the extra CHF 20’000.- would have cost between CHF 30 and 40.- per year; the loss on the claim is CHF 5’000.-
The amount required to replace the broken item at today’s price less depreciation, which includes wear and tear and obsolescence.
The amount insured on the policy in agreement with the insurance company and the policy holder.
The current value is the market value of the car on a given day taking into account depreciation for age, mileage and condition. The base value of the car is the catalogue price plus options. Typical depreciation is calculated at roughly 10% per year.
Current value supplement
With the current value supplement the policyholder will always receive a total loss compensation which is 10 to 20% higher than without it. The best companies compensate 100% of the catalogue price during the first two years of the life of the car. This amount then decreases by 10% to 20% per year so a three year old car would be compensated at 80% of its catalogue price, a four year old car by 70% and a five year old car by 60%.
When an art piece has to be repaired its market value can decrease, this “lost value” can be insured through a serious fine art insurance policy.
The amount required to replace the broken item at today’s price.
*Figures at time of publishing, 01/2019