According to the "Procedure for calculating the insurance premium amounts for the compulsory insurance of civil liability of motor vehicle owners," which the Central Bank of Azerbaijan amended in April this year, starting tomorrow, the "Bonus-Malus" system will be abolished and replaced by the "Insurance History Coefficient" system based on the principle of individual liability.
Medianews.az reports that the Compulsory Insurance Bureau has issued information regarding this.
According to the new system, results affecting the insurance history linked to road traffic accidents will no longer be associated with the person who signs the insurance contract but directly with the driver who actually operates the vehicle.
Thus, regardless of in whose name the insurance contract is signed, a road traffic accident will affect the insurance history of the person who actually operates the vehicle.
In the new model, the complex classes and categories existing in the "Bonus-Malus" system will be abolished, and a simpler percentage mechanism will be applied. Thus, if the insured causes no accidents, for every 275 accident-free insured days, a 5% discount will be obtained. Conversely, if a road traffic accident occurs, a 30% surcharge per incident will be applied to their insurance history coefficient.
According to the changes, the previously applied 1.15 risk coefficient applied when more than one person operated the vehicle will now only be applied when the number of persons operating the vehicle together with the owner is 5 or more. When one car is used by several persons, the insurance premium will be calculated taking into account the insurance history of each of those drivers.
The insurance history coefficient for legal entities will be kept fixed at level 1. However, if the vehicle is used for taxi services, the legal entity's insurance history will also be formed, and depending on whether there was an accident or not, the corresponding discounts or additions will be applied to that coefficient.
The main advantage of the new model is that the insurance history is directly linked to the individual.
This approach will contribute to the system operating more transparently and fairly, to more accurate risk assessment, and to encouraging safe driver behavior.