Educational program: why is compulsory motor insurance more expensive for young drivers, and why do they need it?

CrimeaPRESS reports:

OSAGO is compulsory motor third party liability insurance, which allows the victim to receive payment from the insurance company of the person responsible for the accident. The OSAGO policy covers the cost of repairs up to 400,000 rubles in case of damage to the car and up to 500,000 rubles in case of harm to the life and health of people. As is already clear from the decoding of the abbreviation OSAGO, every driver is required to take out this policy, and for its absence there is a fine. However, sometimes young and novice drivers refuse to insure their car, citing the high price as an argument.

To begin with, let’s figure out what factors influence the final cost of compulsory motor liability insurance:

• Basic tariff of the insurance company
• Territory coefficient
• Bonus-malus coefficient, also known as KBM (the more accident-free driving experience, the higher the discount under compulsory motor liability insurance)
• Limitation coefficient (coefficient depending on the number of drivers who can drive the car; “multidrive” insurance is always more expensive than regular insurance)
• Age and experience coefficient
• Car engine power factor
• Seasonality factor (depends on how many months a year the vehicle is used)

A novice driver may have a question: why do age and experience have such a strong influence on the cost of insurance?

Statistics show: the younger the age and experience of the driver, the more often he becomes the culprit of an accident. Because of this, insurance costs more for young and inexperienced drivers. Drivers under 25 years of age become involved in road accidents 2.1 times more often, and those aged 25–40 years – 2% less often. Such data is provided by the Central Bank of the Russian Federation, while motorists who are over 40 years old get into accidents 35% less often than the Russian average. Moreover, according to Associate Professor of the Department of Economic Theory of the Russian University of Economics named after G.V. Plekhanov Oleg Cherednichenko, it is novice drivers who primarily need car insurance due to the high risks associated with insufficient driving experience and the lack of well-established skills.

Even at current rates, the price of an MTPL policy is only a small part of the total cost of owning and operating personal vehicles, noted Cherednichenko. – The average car owner’s annual costs for fuel, maintenance, repairs and other needs amount to tens or even hundreds of thousands of rubles. Thus, paying for an MTPL policy is a “drop in the ocean” compared to other expenses.

What if a young, novice driver decides to neglect the registration of compulsory motor liability insurance? In this case, he will face a fine in accordance with Article 12.37 of the Code of Administrative Offenses of the Russian Federation in the amount of 800 rubles in the complete absence of a policy and 500 rubles if the driver for some reason was unable to present it. In addition, in the event of an accident, the offender will have to pay for the repair of both cars, and taking into account the rising prices for auto parts, saving on insurance turns out to be financially impractical: the cost of an MTPL policy for a beginner starts from 12 thousand rubles (the upper limit depends, among other things, on the power auto), while the average insurance payment in September 2023, according to the Russian Union of Auto Insurers (RUA), reached 100 thousand rubles.

Of course, in the first years of driving experience, the insurance policy will cost more than that of experienced accident-free drivers, but over time it will be cheaper if the driver does not cause an accident. Young motorists should not forget that an annual one-time fee can save them from lengthy legal proceedings, as well as serious costs in the future. Taking into account the low level of income, for example, among students, this is a key advantage of a responsible approach to compulsory motor liability insurance. Moreover, as a consequence of non-payment of debts after an accident (if the amount has accumulated more than 20 thousand rubles), if there is a writ of execution, the bailiffs have the right to seize the car.

source: press service Information project «OSAGO: public examination»

Crimea news | CrimeaPRESS: latest news and main events