Insurance of personal items in pawnshops: regulator requirements
From 1 April 2023, new requirements will apply to the insurance of personal items accepted by pawnshops as collateral or for storage.
A list of risks subject to mandatory insurance has been issued. It includes risks of natural disaster, fire, flood and unlawful actions of third parties, as well as theft and robbery. The obligation of a pawnshop to insure the risk of loss of and damage to the pledged property at its own expense in favour of clients is established by law.
The regulator’s instruction also limits the size of a franchise deductible, which is a minimum amount of loss not covered by insurance. Such a condition in the contract makes a policy cheaper. The franchise deductible should not exceed 0.1% of the insured amount.
The new requirements will improve the quality of insurance of personal items in pawnshops and ensure the protection of clients’ property interests.