Information on motor vehicle insurances

Motor vehicle insurance for young people

Once you have obtained your driving licence, it will be time to jump into the driver’s seat and develop your skills on your own. This article contains information for young and new drivers on the motor vehicle insurance policies and benefits that Pohjola Insurance provides to new drivers.

New to motor vehicle insurance? Get to know the terms of the field!

Motor vehicle insurance is a versatile form of insurance whose scope and coverage can be tailored to the needs of each driver and vehicle. When looking for your first motor vehicle insurance, you will run into a slew of new terms and concepts, such as motor liability insurance, comprehensive motor vehicle insurance, no-claims bonus, and bonus cover. We have compiled a small primer below that will help you familiarise yourself with the terms of the field before you purchase your first motor vehicle insurance. 

Mandatory motor liability insurance

Every motor vehicle that is used in traffic must be insured with motor liability insurance. Whenever a collision or some other form of damage occurs, the motor liability insurance will compensate any personal injuries that occur during the accident. Motor liability insurance also indemnifies for damage caused to the vehicle or property of the innocent party. 

If, for example, another driver causes a rear-end collision and damages your vehicle, their motor liability insurance will cover both the damage to your vehicle and any medical treatment expenses should you be injured as well. 

Optional comprehensive motor vehicle insurance

In addition to the mandatory motor liability insurance, you can increase the coverage provided by your insurance with voluntary comprehensive motor vehicle insurance. Comprehensive motor vehicle insurance covers your car against various types of loss or damage, and you can tailor your cover to meet your needs. As a customer of Pohjola Insurance, you can choose from three different comprehensive motor vehicle insurance policies: Medium Motor Insurance, Standard Motor Insurance or Super Motor Insurance, which provides the most cover. Please note that some comprehensive insurance plans are not available for older vehicles.

Comprehensive motor vehicle insurance provides several types of accident covers for your car. For example, parking cover compensates any damage caused by an unidentified person to your car while it is parked. Windscreen cover compensates damage caused by, for example, a rock hitting your windscreen. Collision cover compensates the repair costs caused by a collision or if your vehicle is run off the road.

Motor vehicle insurance no-claims bonus

The no-claims bonus is an incentive scheme where your accumulated bonus percentage decreases the amount you pay for your motor vehicle insurance. When you drive without making any claims under your motor vehicle insurance for a full insurance period, your bonus level will increase for the next insurance period. The more bonuses you accrue, the larger the discount to your motor vehicle insurance. 

The motor vehicle insurance bonus system is comprised of two separate bonus schemes: 

  • The motor liability insurance bonus
  • The collision cover bonus for comprehensive motor vehicle insurance (collision cover not included in Medium Motor Insurance)

The motor liability insurance bonus

The starting bonus for new drivers under the motor liability insurance is always 40%, but if you drive carefully and have no accidents, you can reach the 80% maximum bonus level in as little as five years. When you drive for two years under the maximum bonus level, you will be provided with bonus cover for your insurance. This means that claiming one loss covered by motor liability insurance within a single insurance period will not reduce your bonus. 

Collision cover bonus for comprehensive motor vehicle insurance 

The collision cover bonus for comprehensive motor vehicle insurance starts at its maximum level, i.e. 70%. If you cause an accident that is coverable by the collision cover, your collision cover bonus will be reduced by 20 percentage points for the next insurance period. If you manage to maintain the maximum bonus level for five insurance periods, your bonus will be reduced by only 10% if you cause an accident.
Deductible and maximum compensation

The deductible and maximum compensation specified in your insurance policy will come into play should an accident occur. When an accident occurs, your deductible is the amount that you will pay yourself. For losses covered by your motor liability insurance, the deductible is always 0 euros, but the deductibles for comprehensive motor vehicle insurance vary depending on your choices, covers and the damage that has occurred.

Maximum compensation refers to the maximum amount covered by the insurance in the case of an accident. This maximum compensation varies from cover to cover.

What is the best motor vehicle insurance for a young person?

Motor vehicle insurance comes in all shapes and sizes, and most comparisons will inevitably focus on the cost of each policy. The price of a policy is affected by e.g. the make and age of your vehicle, the bonus scheme provided under each policy, and the covers you choose for your policy. The most inexpensive motor vehicle insurance for a young person is most likely one that only includes mandatory motor liability insurance. However, if you are only at the beginning of your driving career, it pays to consider whether the cheapest option is the best for your needs. 

Even though voluntary comprehensive motor vehicle insurance can increase the price of your motor vehicle insurance, it will also provide you with more cover as you learn the ways of the road with your vehicle. Should an accident occur, the cheapest motor vehicle insurance may not prove to be the most inexpensive option. We recommend looking through our comprehensive motor vehicle insurance options before purchasing your motor vehicle insurance.

Motor vehicle insurance for young or new drivers, up to 20% off

Have you completed the slippery driving course yet? Pohjola Insurance wishes to provide new drivers with the best possible prerequisites for learning about safe driving, together with the Finnish Driving Schools Association and our partner test tracks. 
When you complete your driving course at one of our partner test tracks, you will be eligible to purchase your Pohjola Motor Vehicle Insurance for up to 20% off. This offer will remain valid for 6 months after completing the driving course.