Charges for vehicle insurance depends on growth of car fleet in Azerbaijan
Baku, Azerbaijan, Dec. 11
By Emin Aliyev -Trend:
The cost of vehicle insurance next year will depend on car fleet growth in Azerbaijan, chief of the State Insurance Supervision Service under the Ministry of Finance of Azerbaijan, Namig Khalilov told journalists on Dec.11, commenting on the continued decline in fees for vehicle insurance.
"Charges on vehicle insurance are influenced by two factors. The first is the growing number of cars, which increases fee volumes. The second factor is a "bonus-malus" (good-bad) system, which generally affects the reduction of this volume, because most of the drivers are accident free," Khalilov said.
The "bonus-malus" system bases premiums on the insurance claims history of the driver. The fewer the number of accidents ,the less the amount of premium, and vice versa.
"I think that next year the amount and frequency of payments for vehicle insurance will increase, as well as payments for life and health insurance. In addition, it should be considered that traditionally a substantial portion of payments made in the current year is made under contracts concluded in the previous year," Khalilov added.
At present, there are 1.2 million vehicles in Azerbaijan. Every year the number increases by 10 percent. It is estimated that in 10 years the number of vehicles in the country will reach three million.
After the law 'On compulsory insurance' came into force in December 2011, the basic cost of an insurance policy on compulsory civil liability insurance of vehicle owners amounted to 50 manats and is used in regard to cars with an engine capacity of up to 1500 cubic centimetres. With the increasing volume of the engine (from 1500 to 5000 cubic centimetres), coefficients from 1.5 to 5 are added up to the cost. Coefficient 5 is used for cars with an engine capacity over 5000 cubic centimetres.
Previously, insurance premium for all passenger cars was 10 manat.
The contract with the owners of vehicles registered abroad and imported to Azerbaijan for transit purposes was signed for a period of one month, and the insurance amount equals 25 percent of the annual premium for the vehicle.
The official exchange rate for December 11 is 0.7843 AZN / USD.