Third Party Insurance premiums to increase

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The Insurance Fund Administration Agency  has submitted  a revised  third party insurance premium rate to the Council of Ministers for ratification.
Currently, motor vehicles (motorcycles, automobiles, trucks and buses) pay yearly premiums between 150 and 3,000 birr to insurance companies.  The revised proposal will increase the floor price of premiums reasonably.
About 340,773 vehicles bought a policy of Third Party Insurance but more than 150,000 vehicles are driven on roads without having this compulsory insurance.
According to Zewdu Wondem, Public Relation Head of the Agency, the new premiums are calculated considering traffic accidents, inflation rate, types of the vehicles and reinsurance expenses.
“We have seen that the number of traffic accidents increase every year and that results in increased  deaths, injuries and property damages. And we understand that the premium that vehicles are charged doesn’t not match with the current situation.’’
“To increase the premium, we conducted a research that took almost one year and we submit the proposal to the Council of Ministers and I hope the council will ratify it soon,’’ he added. However Zewdu declined to comment by how much the premium will increase.
Insurance companies paid a total of 63.6 million birr compensation for 420 deaths, 249 injuries and 2,854 property damages in accident that has occurred in the last nine months.
The agency which is responsible to provide health coverage for hit and run cases, paid 1.15 million birr for 28 deaths and 10 injuries during the same period.
“Anybody can testify that the third party insurance system that was aggressively applied in the past six years gives people the opportunity to get fast emergency medical care from hospitals or clinics without any preconditions and when death occurs, owners of the car do not worry about compensation because the insurance company will cover it. Still, we have to get all motor vehicles covered by third party insurance and we also have to raise  awareness of hospitals, clinics and the society what the insurance is all about  to get better results.’’
The agency  was established in 2011 when parliament enacted a law forcing all vehicles  to get securities against third party risks by a proclamation ratified in 2008. It started implementing the provisions of the proclamation in September 2011.