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Bad news for insurance companies and good news for drivers: car insurance to be cheaper

21.01.2020,12:54


January 21, Fineko/abc.az. Discounts in the Bonus-malus system used for compulsory car insurance in Azerbaijan reached 40%.

ABC.AZ reports that experts estimate this as a good event for car owners, but not a positive one - for insurance companies.

Thus, bringing the Bonus-malus system to 40% means that until now drivers who have not committed an accident will continue to pay only 60% of the mandatory insurance premium.

This is why an additional problem is created for insurance companies. According to experts, insurance companies that already suffer from a high level of loss in compulsory insurance will now be able to collect less insurance premiums.

It should be noted that the Bonus-malus system was created in Azerbaijan in 2011 in accordance with the Law on Compulsory Insurance. According to this system, if the insured driver did not have an accident during the insurance period, then next year his insurance payments will be reduced by 5%. That is, the insurance premium for each year without accidents is reduced by 5%, and this is called a Bonus. Those who make an accident pay even more in the next year's insurance premium, which is called Malus. The purpose of this system is to encourage disciplined drivers in Azerbaijan, punish undisciplined drivers, and protect insurance companies from damage the disciplined drivers.