Finance - Banking

Ministry of Finance does not want to abolish compulsory motorbike insurance

TB (according to VnExpress) January 19, 2025 06:50

The Ministry of Finance said that motorbikes are still the main cause of accidents, so compulsory insurance will help protect rights and reduce risks for traffic participants.

Recently, voters in An Giang and Dong Nai provinces proposed to change motorbike insurance to a voluntary form when people have a need instead of the current mandatory form because people face many difficulties in carrying out procedures when an insurance event occurs.

Civil liability insurance for motor vehicle owners (including cars and motorbikes) has been implemented in Vietnam since 1988. But to date, according to the Ministry of Finance, motorbikes are still the main means of transport and the largest source of accidents in Vietnam, accounting for 63.48% of traffic accidents.

Therefore, according to this agency, this is still one of the tools to protect the rights of traffic participants. Normally, the motorbike insurance premium is from 55,000 - 60,000 VND, but the insurance benefits are paid up to 150 million VND per person for loss of life and 50 million VND for property damage.

Authorities also confirmed that most countries apply compulsory civil liability insurance for owners of cars, motorbikes, scooters, and even electric bicycles. For example, in developed countries such as the US, EU, Japan, Korea, or developing countries such as India, China, and many ASEAN countries.

Unlike voluntary insurance, compulsory civil liability insurance of motor vehicle owners does not pay for personal and vehicle damage to the insurance buyer or understood as the vehicle owner.

This is a type of insurance in which the insurance company will compensate the victim (third party) on behalf of the car owner if the car owner unfortunately causes an accident. However, many experts have said that people do not benefit proportionally from the mandatory purchase of this insurance.

In the first half of 2024, about 6.5 million motorbikes will participate in compulsory insurance, accounting for about 9% of the total number of vehicles in circulation nationwide (estimated at 72 million units). Revenue from this type of insurance in the first 6 months reached more than 430 billion VND, compensation expenses were 41.9 billion VND and compensation reserves were 35.86 billion VND. This figure does not include management costs and commissions.

The Ministry of Finance recognizes that regulations related to compulsory civil liability insurance for motor vehicle owners have inherited and supplemented many new regulations to increase benefits for motor vehicle owners regarding insurance premiums, insurance amounts, and simplify documents and compensation procedures.

In the coming time, the ministry will continue to coordinate with the Vietnam Insurance Association and insurance companies to promote and help people better understand their rights and responsibilities when participating in insurance. In addition, they are committed to having solutions to simplify procedures, ensuring that the compensation process takes place quickly and transparently. In addition, measures to prevent insurance fraud will be applied to protect the legitimate interests of the people.

TB (according to VnExpress)
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Ministry of Finance does not want to abolish compulsory motorbike insurance