What could be the reasons for the rise in insurance prices in 2021?
If the cost of policies changes for all motorists, this means that the Central Bank has changed one of two factors influencing the pricing of compulsory motor insurance:
- basic tariffs as the basis for increasing the price of the policy when they change by law,
- coefficients - here OSAGO may cost more next year if the data or conditions of the driver or the car have changed.
Yes, it is the Bank of Russia that is involved in changing the cost of compulsory motor liability insurance; it, as the regulator of the compulsory motor liability insurance market, sets tariffs and monitors insurance companies.
The changes were last adopted at the end of this summer. Instructions of the Bank of Russia No. 5000-U were replaced by Instructions of the Central Bank of the Russian Federation dated July 28, 2020 No. 5515-U. It is this document that determines what the cost of the policy should be, what it depends on and how it changes.
Why did my MTPL cost more?
If insurance has become expensive, you will have to understand the reasons, since there are a lot of factors that could affect the final price of compulsory motor liability insurance.
Basic tariffs have changed
Base rates form the base price of your insurance. Why tariffs, are there many of them and why are they different?
In fact, these are not even tariffs, but basic insurance rates. The most interesting thing is that these rates are set by the insurers themselves, but within a certain interval from and to.
In 2021, for passenger cars of individuals, these numbers range from 2,471 rubles to 5,436 rubles.
Before the change, these values were in the range from 2,746 rubles to 4,942 rubles.
If your policy has become more expensive, then it is possible that the insurance company you contacted has set the base rate at the maximum level, and, accordingly, the cost of the policy has increased.
When was the last time you were in an accident?
It’s worth clarifying right away that it makes sense to remember only those accidents in which you were to blame. Because whether an innocent victim receives a payout does not affect the value of his policy for the next year.
Fault in an accident is associated with one of the most “influential” coefficients on the final cost of compulsory motor liability insurance. Only he alone can change the cost of the policy by more than 2 times. The abbreviation of this coefficient is most likely known to most motorists - this is KBM.
- A driver who has been driving on the country's roads for 10 years without an accident can have a minimum KBM value of 0.5.
- The maximum value is 2.45. It is quite easy for a novice driver to earn it - the insurer needs to make 2 insurance claims per year under his policy.
But a driver with a BMR equal to 0.5, after only 3 insurance claims, will pay twice as much for the compulsory motor liability insurance policy for the next year.
Information about all insured events and compensations is stored in the RSA database. After the latest innovations, the KBM began to be calculated on April 1 of each year, and does not change for the whole year. Accidents that occurred during the same year are taken into account, but very often insurers “forget” to take into account the insured event, and the driver receives an increased BMI for the MTPL policy. However, there are often cases when, after a year or even two, a previously unreported accident comes to light, and the KBM “flies off”.
You can check your KBM on the RSA website in the appropriate section.
You can compare your KBM with the coefficient by which the policy was calculated; to do this, you need to check the OSAGO policy itself on the RSA website. Among other information, there will be the size of the CBM used. Check link.
It is important to take into account that the policy information indicates the minimum KBM for all eligible drivers. That is, if you have someone written into your contract whose KBM is greater than yours, then someone else’s coefficient will be displayed.
Do you have the same car or a different one?
The next reason why OSAGO has become more expensive is the power factor of the vehicle. If you bought a new car, and its engine power is greater than the previous one, then the power factor for the policy may change upward. The following values are currently in effect:
- up to 50 hp – 0.6,
- from 50 to 70 inclusive – 1,
- 70-100 inclusive – 1.1,
- from 100 horses to 120 – 1.2,
- if hp 120-150 – 1.4,
- over 150 – 1.6.
Thus, if, for example, you previously had a car with a power of 69 hp, and now you purchased a new one with a power of 180 hp, then when calculating the cost of insurance in the new insurance period, it will become more expensive by 1.6 , when the calculation procedure reaches this coefficient (but it may still decrease or become more expensive with further calculation taking into account the KBM and other factors).
Have you moved to another city?
The territory of primary use of the vehicle is established at the registration address of the owner of the car. Each region has its own coefficient. If you moved to another city and reported this to the insurer in accordance with the MTPL Rules, then it must recalculate the cost of your policy for the remaining period. New insurance for the next year will be calculated using a new coefficient.
Today, the minimum territorial coefficient is 0.64, and the maximum is 1.99.
You can find and check the CT value for your region or city using the link.
If insurance is unlimited
Before making an MTPL policy without restrictions, calculate how the cost of such insurance will increase.
In 2021, the contract without restrictions will be calculated using a coefficient equal to 1.94. And this immediately means an almost twofold increase in the cost of compulsory motor liability insurance compared to last year and a policy with a limited number of drivers.
Although, it may be that someone with a small age and experience was enrolled in OSAGO, which means that his KBM and other coefficients were large, and the policy was expensive, but in OSAGO without restrictions, all this will not be taken into account, and the price may even decrease in isolated cases.
Error in calculation by insurance company
If you apply for an MTPL policy at the office of an insurance company or with a broker, then even though the registration takes place through a special program into which almost all the data is “pulled”, the possibility of an error cannot be ruled out.
For example, the operator will simply describe himself and indicate the wrong data, this can happen to anyone, so you should always check the correctness of all the data in the received policy, especially if the price of the policy has increased compared to last year.
If such an error can be identified, then you will have to contact the insurer’s office, where you will demand that everything be corrected and the overpaid money returned.
You changed your insurance company
You can conclude an insurance contract with any insurer that has the appropriate license. The insurance company has no right to refuse to conclude a contract. Therefore, you are free to choose any insurer.
However, it is worth remembering that not all companies will have the same cost of MTPL for your car. All this is due to the fact that insurers set different basic ratios, which were already discussed above. Taking into account the permitted range of 2,471-5,436 rubles, insurance companies can set any value.
You have added a friend or acquaintance to your policy
Even if you didn’t plan to let your friend drive your car, but simply signed him up so that he wouldn’t lose his MPV, then the cost of your policy now depends on him.
The fact is that to calculate the amount of insurance, the maximum KBM of all drivers allowed to drive is used. Therefore, if a friend’s coefficient is higher than yours, then insurance will cost more.
I haven't had any accidents, but insurance costs more than last year - why?
If insurance becomes more expensive when driving without accidents, then you need to find out the roots of this. You can determine the reason for the price increase by answering the following questions.
- Do you carry liability insurance for the same car you had last year?
- Has your registered address changed?
- Are you the only driver allowed to drive?
- Has the vehicle driver's license changed and have other drivers on your policy had any accidents?
- Is your KBM correctly taken into account in the insurance calculation?
- Are you renewing your policy with the same insurer or signing a contract with another?
- Has your insurer's base rate changed or is it different for the new insurance company?
To avoid unnecessary problems and waste of time, it is better to independently calculate the cost of your policy in advance, and then conclude it. This way, by the way, you can check whether the insurer made any mistakes and whether everything was taken into account correctly.
Is it possible and how to reduce the cost of compulsory motor insurance?
It is possible to reduce the fee for an MTPL policy, and further we will tell you about ways to do this.
There are the simplest and most rational ways to reduce the cost of an MTPL policy; for example, instead of an unlimited insurance policy, you can sign up for an agreement with restrictions on the number of drivers. Or not to include in the policy a friend who got into an accident in another car, and his vehicle's vehicle became larger than it was before.
To make your MTPL policy cheaper, choose an insurance company in advance with the lowest insurance rate. You can view the company's tariffs on the RSA website.
But there are ways that work, but it will not be easy to implement your plans. For example, change the registration address to another region, which has the smallest territorial coefficient. Well, or even re-register the car there in the name of some relative, and simply include yourself in the policy.
You can also buy another car, less powerful, but the policy will not become much cheaper in this case, the power coefficients differ insignificantly.
How to make changes to the current OSAGO policy: Alfastrakhovanie, Rosgosstrakh, Soglasie.
You need to know that making changes using the company’s online resource is impossible if the policy is not E-OSAGO . However, you also do not need to visit the exact branch where the policy was issued - the procedure is available at any office of the company.
To carry out the process:
- The application is addressed to the insurance company, due to the fact that entering new information is available only upon request. Submission of papers can be carried out by a third party, provided there is a notarized power of attorney. Drawing up an application is available both in simple written form and in a specially designed one, which is issued upon application. The second option would be more correct, in which the client comes to the office and explains what needs to be changed. In this case, in addition to the issued sample application, the insurance company employees will help you fill it out, and possibly issue a finished document with all the adjustments, and the client will only need to sign it.
- The list of documents listed above is submitted.
- Issuance of an insurance policy. You can receive either an existing document (with a note indicating the change made) or another form.
After passing these stages, the procedure can be considered complete.
KBM flew off - what to do?
In order to understand the action plan for restoring the KBM, you need to understand the reason why it fell off.
- If you sold the car and did not sign up for any other policies for more than a year, then your CBM will be lost, since only the data that was available for policies that were valid no more than a year ago is used for calculations. At the same time, the coefficient does not drop by a certain value as if there is an accident, but immediately to one.
- As for accidents, if you had them, then the KBM will fly off in the next insurance year after the insurance payments. If this did not happen and they forgot about you, then there is no need to be particularly happy; your accident may be taken into account in a year, and sometimes even in two. However, you can try to overcome this situation, since, as was written earlier, the coefficient should be taken into account according to the policy no later than a year ago, everything was fine there, and, therefore, last year’s coefficient should be applied.
- The most common situation when it is necessary to restore the CBM is the indication of an incorrect coefficient by the insurer itself. In this case, incorrect data gets into the database, and you can change it only by contacting the insurance company with which you have already entered into or are about to enter into an agreement. If the insurer does not correct anything, then you will have to complain further, to the RSA, and then to the Central Bank. The final authority in such a dispute is the court.
Application for payments under OSAGO online
Starting from 2021, motorists will be able to submit an online application for payment under OSAGO. The bill was adopted by the State Duma at the first reading in December 2021. The form for submitting an online application will appear on the State Services portal and in the mobile application “OSAGO Assistant”. Photos and video materials will serve as evidence of the accident.
Dear OSAGO? Restore KBM now
and stop overpaying insurers!
The service will send an application to RSA. Recovery time for KBM: from 12 hours. Find out more
The insurer reserves the right to inspect the damaged vehicle if the information received online does not allow us to determine the existence of an insured event and the amount of payment.
What happens if I refuse to buy compulsory motor insurance?
If you just bought a car and no longer want to spend extra money on a policy, then you will be a little disappointed. You will have to buy an MTPL policy in any case; without it, the car will not be registered.
If you take out a policy only for car registration, then in the future you will not receive benefits, but only problems and expenses. First, for fines, because driving a vehicle without an MTPL policy is punishable under Article 12.37 of the Code of Administrative Offenses, and then, in the event of an accident through your fault, for compensation for damage to the victim.
At the same time, the legislator wants to significantly increase the amount of fines for the lack of compulsory motor liability insurance, and also plans to introduce automatic recording from cameras for this offense.
A fake policy, which usually costs much less than a real policy, will not save you from fines or compensation for damage, so we will immediately warn you about the senseless waste of money on this. At the same time, you can still find yourself under the article if you purchase or use an obviously counterfeit policy.
But scammers, knowing all this, can sell you a “left” OSAGO policy at full price, so that you have fewer questions. To avoid this, we advise you to check its validity on the RSA website after concluding a contract.
Basic OSAGO rate
In addition to traffic violators, changes to the Federal Law “On Compulsory Motor Liability Insurance” affect several categories of motorists. The change in the base rate will affect legal entities, namely vehicles that are planned to be used with a trailer. Accordingly, you will have to pay extra for the fact that a hired employee will drive a car with a trailer.
When determining the base rate, the insurance company may take into account “other factors” that influence the likelihood of harm.
