AZE.US
Azerbaijan is overhauling its compulsory motor insurance system, with premiums set to rise by 30% for drivers who cause an accident, while motorists who go a full year without a crash will receive a 5% discount when renewing their policy.
The change follows a decision by the Central Bank and is due to take effect in two months.
Under the new rules, insurers will no longer focus primarily on the registered owner of the vehicle when calculating future premiums after a crash. Instead, the key factor will be the insurance record of the person who was actually driving the car at the time of the accident.
That marks a clear shift from the old system, under which the vehicle owner could face a higher premium the following year even if someone else had been behind the wheel under a power of attorney arrangement.
Now, the accident record will be attached to the driver who caused the damage. In practical terms, that means a person with a poor driving history will no longer be able to reduce the cost simply by insuring the car under the name of someone with a cleaner record.
The reform also simplifies the surcharge system. Previously, if one person had several vehicles insured in their name, a higher coefficient could be applied automatically after an insured event.
Under the new mechanism, the system moves to a more direct approach: each at-fault accident adds 30% to the insurance premium, while each claim-free year earns a 5% reduction.
Experts say the updated rules are meant to make pricing more transparent and tie insurance costs more closely to actual driving risk.
Another important change is that the revised bonus-malus approach will no longer apply to legal entities, meaning the new driver-based logic is aimed primarily at individual motorists.
Drivers interviewed in local reports said the new rules could push people to be more disciplined on the road, since safer driving now has a more direct and measurable financial benefit.
AZE.US