MTPL insurance price may rise by 48%
MTPL insurance may go up by 21% if it is decided to increase life and health damage payments. Abolition of wear and tear, which is also envisaged in the Ministry of Finance's bill, would add another 27% to the price of the policy. Thus, MTPL can go up in price by 2,567 rubles.
The Ministry believes that the changes should be introduced in stages to avoid a sharp rise in the cost of insurance. Firstly, it is necessary to increase the limit of payments on life and health, and at least in a year to cancel the consideration of depreciation of parts. They added that according to preliminary estimates the first change would require raising of MTPL insurance rates by at least 21%, or an average of 1123 rubles, and abolishing of wear and tear of parts at least by 27%, or about 1444 rubles, given that the average premium on obligatory car insurance policy on December 23 was 5349 rubles.
Thus, MTPL could go up in price by 2,567 rubles, or 48%.
The insurance companies have also supported the innovations. According to Tatiana Kudryavtseva, head of the MTPL insurance portfolio management centre at VSK Insurance House, the average wear and tear of the vehicle reaches 30-40%. That said, the average age of a car in Russia is 12 years, so abolishing wear and tear would have the most significant impact on rates, agreed Denis Makarov, director of compulsory insurance at AlfaStrakhovanie. However, the innovations will increase the value of MTPL for customers. Anton Pozhidaev, head of SberStrakhovanie's MTPL insurance business, estimates that the average payout could increase by 20-25%.
Alexey Tyurnikov, project manager of Absolut Insurance, expects that the policy price may rise even higher: by 20-40% due to limits and by 30-40% due to the second innovation. At the same time, the amount of 2 million is even lower than the same amount for life and health insurance in many European countries.
These changes equalise the law in Russia on MTPL insurance and bring it closer to global practices. However, the abolition of taking into account wear and tear could partially make the price of the policy subject to rising prices for spare parts, said Ilya Solomatin, the deputy general director for external relations at Ingosstrakh. According to him, the limit of payments on life and health is planned to increase as early as January 1, 2023.