Mandatory Auto Insurance to Increase: Details on New Changes

Starting from February 7, 2022, there will be changes in the mandatory auto insurance sector. Tigran Keyan, president of the "Driver's Company" public organization, shared details about these changes in an interview with Auroranews.

According to the council's decision No. 47-L of the Armenian Bureau of Insurers (hereinafter referred to as the Bureau) dated December 23, 2021, changes related to the application procedure of the "Bonus-Malus" (hereinafter referred to as BM) system and the values of BM coefficients will come into effect on February 7, 2022.

As a result of this change, the insurance premium paid by vehicle owners under the latest contract will increase by 3000 AMD, to which the "Bonus-Malus" system will be applied. Consequently, the effective increase, depending on the amount of the bonus, will be between 1500-3000 AMD.

It is important to note that due to the concentration of insurers in bonus classes, this means that for most insurers, the increase in insurance premiums will be less than 3000 AMD. For all insurers entering the system for the first time, a premium of 41,000 AMD will be established.

The "Bonus-Malus" system will see changes in the coefficients for malus classes. As a result of these changes, an insurer's bonus or malus class will be determined not only by the number of accidents but also based on the size of compensation for each accident. According to the new system, in case of an insurance claim, the insurer's BM class will increase by 3 classes if the compensation amount is up to 100,000 AMD. It will increase by 4 classes for compensation amounts between 100,000 and 200,000 AMD, and progressively, an insurer's BM class may increase by up to 8 classes if the compensation exceeds 1.8 million AMD. Therefore, in the case of insurance claims, malus classes will be applied considering the damages caused, meaning that drivers causing minor damages will have a lower malus.

Andrey Misakyan, a Facebook user, wrote on his page:
"If compensation has been paid due to your fault:
1. 0-100.000 AMD, the class will increase by 3 classes
2. 100.000-200.000 AMD, the class will increase by 4 classes
3. 200.000-500.000 AMD, the class will increase by 5 classes
4. 500.000-1.000.000 AMD, the class will increase by 6 classes
5. 1.000.000-1.800.000 AMD, the class will increase by 7 classes
6. More than 1.800.000 AMD, 8 classes, which can reach up to a 300% increase.
Good news for those without accidents: your premium will only increase by 3,000 AMD per year, on which your current discount will also apply."