Ve­hi­cle in­sur­ance rates dou­ble

The Myanmar Times - - Business - BY AYE NYEIN WIN ayenyein­win@mm­

VE­HI­CLE in­sur­ance rates at the low end of the mar­ket are set to more than dou­ble, Myanma In­sur­ance has an­nounced. But the com­pany also said it would dou­ble the level of its pay­outs.

Last month, Myanma In­sur­ance an­nounced that it would raise the pre­mium rate for third-party in­sur­ance for all ve­hi­cles and that, start­ing on Au­gust 1, it would dou­ble the size of its pay­outs, even for driv­ers who were still pay­ing at the old, lower rate.

Myanma In­sur­ance’s cur­rent rates range from K2000 to K10,000 a year depend­ing on the size of the ve­hi­cle. As of Au­gust 1, the rate has in­creased to the K5000-K15,000 range.

“We de­fined the cat­e­gories as pri­vate cars and busi­ness-use cars. For trucks, the rate de­pends on ton­nage, and we have dif­fer­en­ti­ated eight types,” said man­ag­ing di­rec­tor U Aye Min Thein.

“Nor­mally, low en­gine-power pri­vate cars must pay only K2000 a year. The new rates start at K5000. But in the event of an ac­ci­dent dur­ing the month of Au­gust, we will com­pen­sate in ac­cor­dance with the new rate even if the own­ers are still pay­ing premiums at the old rate.”

Un­der the old rate, Myanma In­sur­ance paid out K500,000 com­pen­sa­tion for death and 80 per­cent of the hospi­tal fees for in­juries. Un­der the new rate, the com­pany will pay K1 mil­lion for a death and K800,000 for the costs of in­juries.

The com­pany pays out on av­er­age K6 mil­lion a day, for 12 ac­ci­dent deaths and 20 in­juries. That sum will now likely rise to K12 mil­lion, based on the es­tab­lish­ment of three new cat­e­gories of ve­hi­cle: small, medium and large.

“Ac­cord­ing to the Road Trans­port Ad­min­is­tra­tion De­part­ment, there are nearly 800,000 cars in the whole coun­try. Adding mo­tor­cy­cles and other ve­hi­cles, more than 5 mil­lion ve­hi­cles are reg­is­tered with RTAD,” said U Aye Min Thein.

“The num­ber of own­ers is fewer than 5 mil­lion, be­cause many peo­ple own more than one ve­hi­cle.”

“As the pre­mium rate in­creases, own­ers will ben­e­fit. In the event of an ac­ci­dent, even if the driver or owner can­not pay com­pen­sa­tion to the other driver in­volved, Myanma In­sur­ance will be able to com­pen­sate the vic­tim.”

In the 2015-16 fi­nan­cial year, Myanma In­sur­ance paid out more than K400 mil­lion in third-party in­sur­ance com­pen­sa­tion and K445.22 mil­lion in com­pre­hen­sive in­sur­ance.

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