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|Additions to auto accident rules ease insurers’ responsibilities|
The government has issued Decree No.03/2021/ND-CP on compulsory insurance for civil liability of motor vehicle owners, which will come into effect from March 1. The main focus of the decree is the addition of cases in which insurances can refuse to compensate for.
Along with seven existing regulations, insurers will no longer indemnify for damage if accident-causing vehicle drivers have alcohol levels in their blood or on their breath, or if they have been found to have used banned drugs.
Tran Nguyen Dan, director of the Institute of Insurance and Financial Risk Management said that he agreed on updates, which should contribute to lowering incidents involving drugs and alcohol in traffic.
“However, if the accident-causing drivers do not have the capacity to compensate for victims, it is still unsure as to who will be in charge of protecting and compensating for victims,” Dan said. “Thus, it is necessary to add a special regulation relating to compensation for victims in such cases. Notably, the insurers could build a fund to provide humanitarian aid for the victims,” Dan said.
Decree 03 also added numerous regulations on compulsory insurance for civil liability of motor vehicles owners. Notably, people can be granted an e-certificate when they buy compulsory insurance.
Regarding two- and three-wheel motors and motorbikes regulated by the Law on Road Traffic, the insurance period is at least one year and a maximum of three years.
In addition, Decree 03 also clarifies preliminary compensation on damage in term of health and life, simultaneously simplifying files for compensation. Elsewhere, insurers are ramping up their automobile and accident insurance products, while enhancing their customers experience in a synchronous approach.
For instance, US insurer Liberty Insurance Vietnam provides a wide range of suitable services, including personal automobiles, specialty lines, reinsurance, and commercial automobiles, to name a few.
Specifically, the firm is working with e-wallet MoMo to offer an online insurance platform for cars in a bid to bring safety to customers in a more convenient setting.
Other foreign lenders such as Shinhan Bank Vietnam and HSBC Vietnam are also cooperating with locally-invested Bao Viet Insurance to introduce “hassle-free driving” vehicle insurance with many attractive benefits and competitive premium rates.
Other significant players in the auto liability coverage and financial protection regarding accidents include Bao Minh Insurance, PVI, PTI, Bao Viet, and Pjico. What is more, the new decree also mentions that both Vietnamese and foreign insurers can consider an increase in the levels of insurance premiums.
Thus, from March 1 insurers are allowed to proactively increase their premium by up to 15 per cent compared to the prescribed premium based on accident history of each motor vehicle, and risk-accepting capacity of the insurance firm.
Mandatory motor vehicle and motorbike insurance: Cases in which coverage
disclaimer clauses are applied
According to Decree No.03/2021/ND-CP, insurers are granted immunity from payment of indemnities in the following cases:
- Road vehicle owners or suffered persons deliberately cause damage;
- The at-fault driver intentionally flees the accident scene to avoid his/her exposure to civil liability (except in the case of intentionally running away but having already assumed the civil liability of the vehicle owner);
- The driver is underage or too old to operate a road vehicle, or does not hold a valid license. Current regulations laid down in Decree No.103.2008/ND-CP only prescribe coverage exemptions are applied to the act of “driving without holding driver’s licenses or with driver’s licenses not appropriate for road vehicles requiring driver’s licenses”.
- Damage indirectly results in reduced commercial value, damage associated with the use and operation of damaged property;
- Damage to property is caused by driving with blood or breath alcohol contents, or under the influence of narcotic drugs and banned psychotropic substances (the current Decree 103 does not set out this regulation);
- Damage to property is caused by the act of theft or robbery occurring in the accident;
- Damage is caused to special property, such as gold, silver, precious jewels, and other valuable papers, for example banknotes, antiques, precious, or valuable paintings or photos; also if damage is caused to corpses or mortal remains; and
- Such incidents as wars, terrorism, or earthquakes occur.