Vehicle insurance rates double
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.