AZE.US
The cost of comprehensive car insurance is rising in Azerbaijan as newer vehicles, particularly hybrids and electric cars, become more expensive to repair.
The voluntary coverage, commonly known in Azerbaijan as Kasko, is also expected to undergo regulatory changes aimed at bringing the local insurance market closer to international standards.
Aliyar Mammadyarov, first deputy chairman of the Central Bank of Azerbaijan, said the planned reforms would define the rights and responsibilities of insurers and customers more clearly while improving consumer protection.
Emil Aghabaghirov, a member of an expert group at the Azerbaijan Insurers Association, linked the recent price increases to the growing number of new-generation vehicles entering the country.
Many recently imported hybrids, plug-in hybrids and electric vehicles are valued above 20,000 manats, or approximately $11,765. Their replacement parts are often more expensive and can be difficult to find on the secondhand market.
Higher vehicle values and repair costs increase the potential losses faced by insurance companies, pushing premiums upward.
Transport expert Adil Nabiyev said inflation, exchange-rate movements, rising service charges and larger insurance payouts were also contributing to higher prices.
Repairs involving batteries, electronic systems and other components used in hybrid and electric vehicles can be significantly more expensive than work on conventional cars. The gradual renewal of Azerbaijan’s vehicle fleet has therefore increased financial risks for insurers.
The proposed reforms may introduce more standardized contracts, clearer coverage terms and pricing based more closely on each driver’s individual risk profile. This could result in lower premiums for drivers with safer records.
Authorities are also considering wider use of mobile applications and digital services, allowing customers to purchase coverage and file claims more quickly. A microinsurance mechanism could eventually make limited coverage available to lower-income motorists at reduced rates.
Experts warn, however, that drivers should not choose a policy based on price alone.
Before signing a contract, customers should check which risks are covered, the size of the deductible, the circumstances in which compensation may be refused, and whether repairs will use original or alternative parts. They should also clarify which repair shops may be used and how long claim payments can take.
A cheaper policy may offer limited protection when an accident occurs. The main question is whether the contract provides meaningful coverage and whether the insurer will deliver the promised compensation in practice.
AZE.US