AZE.US
Azerbaijan is changing the way compulsory motor insurance premiums are calculated, with the new rules set to take into account not only the vehicle owner’s record but also the insurance history of other people legally allowed to drive the car.
Under changes approved by the Central Bank, if more than one person has the right to operate a vehicle, insurers will apply the risk coefficient of the driver with the highest-risk insurance history.
That means the final cost of the policy will be based on the person seen as the riskiest driver, even if the contract is formally issued in the name of someone with a better insurance record.
For example, if the insurance premium for the vehicle owner is 100 manats (about $59), but the premium for another person listed under a power of attorney is 175 manats (about $103), the higher amount will be applied.
The change is aimed at closing a loophole that previously allowed some drivers to reduce insurance costs by registering a policy under a person with a lower risk coefficient, even though another driver with a worse record also had the right to use the vehicle.
Canceling the power of attorney immediately before renewing the insurance will not necessarily solve the issue. The system will check active powers of attorney during the one-month period before the insurance contract is issued.
Experts say the new mechanism should make risk assessment more accurate and support the long-term stability of Azerbaijan’s compulsory motor insurance system.
AZE.US