More people turn to vehicle insurance in 2016

Azerbaijan’s Compulsory Insurance Bureau, established to protect interests of insured persons and third parties, who suffer damages and losses, increased the number of contracts in 2016.

So, the Bureau registered 996,632 contracts on obligatory civil liability insurance of vehicles (OSAGO), which is 3.3 percent more than in 2015.

Premiums collected under these contracts totaled 79.8 million manats ($44.3 million) (annual growth of 4.4 percent).

The average amount of charges for OSAGO registered in Azerbaijan amounted to 88 manats ($48) last year. This is 15.2 percent more than the year before.

In 2016, insurance companies of the Bureau concluded 1,152,066 insurance contracts on non-life insurance, which is 6.8 percent more than in 2015.

The fees on these contracts amounted to 106.08 million manats ($58 million), which is 4.8 percent more than in 2015.

As much as 16 companies are the members of the Bureau with 13 being eligible for the sale of compulsory insurance policy.

OSAGO is compulsory by law for anyone, who owns a vehicle. Driver must have the minimum OSAGO insurance (which must be carried all times while driving) in order to drive any vehicle in Azerbaijan.

After the entry into force the law "On compulsory types of insurance" in December 2011, the basic cost of the insurance policy on OSAGO is 50 manat ($27), which applies to vehicles with an engine capacity of 1,500 cubic centimeters.

In 2016 insurance companies of Azerbaijan, within the Green Card system issued 10,514 international insurance policies for vehicles.

Some 7,497 of these agreements were signed with owners of vehicles driving to Turkey and Iran, 2,569 to Russia, Ukraine and Moldova, and 448 to other countries included in the system of Green Card.

The Green Card is an international system of motor vehicle liability insurance which functions since 1951. The system was introduced in Azerbaijan in 2016.

The main objective of the Green Card System is settlement of claims of persons injured as a result of road accidents involving foreign registered vehicles, ensuring that victims of accidents involving foreign registered vehicles are not disadvantaged as well as facilitation of the movement of vehicles across international borders by the use of an internationally acceptable insurance document. The Green Card system currently comprises 48 countries including the whole of Europe, Russia, Israel, Morocco, Tunisia and Iran.

In 2016 insurance companies issued 140,848 policies on compulsory property insurance. Fees on insurance contracts amounted to 25.2 million manat ($13.8 million).

Compared to 2015, the number of contracts on the specified type of insurance increased by 30 percent, while the volume of fees by 1.5 percent.

Insurance of houses and apartments for the period had 80.78 percent of policies, administrative buildings - 0.3 percent, other real estate - 18.92 percent.

Compulsory insurance of immovable property applies to all types of buildings, houses and apartments belonging to individuals and legal entities. In this case the insured situation is considered the facts related to damage to this property as a result of fire, explosion, short circuit in the electric system, an accident in the sewer or water system, natural disasters, etc.

Tariff on this type of insurance is 0.2 percent of the insured sum. The maximum amount of insurance coverage for real estate in Baku is 25,000 manats ($13,000), in Ganja, Sumgayit and Nakhchivan - 20,000 ($11,000), in other regions - 15,000 manats ($8,000). The cost of insurance is respectively 50, 40 and 30 manat ($27, $22, and $16).