Changes in OSAGO: price customisation and support to car owners amid pandemic
The State Duma has adopted a law aiming to enhance the pricing system in OSAGO (compulsory motor third-party liability insurance) and support car owners amid the anti-coronavirus restrictions in place.
Insurers will offer customised insurance rates to car owners within the price range established by the Bank of Russia. An insurance rate will depend on factors characterising a particular driver. Violations of the road rules may be considered as one of such factors. These amendments will become effective 90 days after the official publication of the law.
The approved amendments are a key element of the OSAGO reform proposed by the Bank of Russia jointly with the Ministry of Finance of the Russian Federation. At the first stage, that is, in January 2019, the Bank of Russia altered the approaches to measuring a range of multipliers and expanded the price range. This has enabled a more differentiated approach to setting insurance rates and improved the competition among insurers.
Since it may be difficult to arrange a technical inspection due to the anti-coronavirus restrictions, the law also provides for the possibility to sign an OSAGO contract without a diagnostic certificate. However, a diagnostic certificate shall be submitted to the insurer within one month after the cancellation of these restrictions. This provision is applicable to OSAGO contracts concluded from 1 March through 30 September 2020.