How much does auto insurance cost in Colombia and what do the policies cover?

2023-06-03 04:07:04

Having a vehicle has its great advantages, one of them is that it can be transported anywhere, and even in the most unforeseen moments such as going to a hospital or a trip. Thus, It is important to insure an automobile policy because you are not exempt from suffering an accident that may arise while using your car.

Insurers offer different services within all-risk insurance, in which full coverage is provided in the event of theft, support for damages to third parties in a possible accident and technical assistance in case you are stranded or also specialized workshops to repair cars.

Vehicle policies are the most sold insurance in Colombia. – Photo: Getty Images/iStockphoto

In Colombia, one of the things that is always requested or consulted when talking about road accidents is the Compulsory Insurance against Traffic Accidents (Soat), since this is a tool created many years ago by the national government to ensure prompt and correct care for the victims of this type of incident, regardless of whether they are a cyclist, motorcyclist, driver of heavy-duty vehicles or pedestrians.

Although, these insurance services have a cost that not only depends on the entity with which it is purchased, but also the model, make, driver behavior and coverage you choose to preserve the investment, whether personal or family, that the vehicle represents.

According to a statement from the technical vice president of the Federation of Colombian Insurers (Fasecolda), Carlos Varela, these factors are based on the total value of the insurance, due to the the mobility of the country’s highways, incidences of road accidents, the Market Representative Rate (TRM) and even inflation.

In addition, the latter is one of the reasons why the policies increased by more than 100%, a cost of living through the skies (13.34% annual inflation for March 2023), a dollar that refuses to drop below 4,400 pesos and, with this, the devaluation of the Colombian peso continues and, together with a slowdown in the economy, have caused an imminent affectation.

The price of car insurance rose in 2023. – Photo: NICOLAS LINARES

For example, the all-risk insurance for a 2011 Kia Picanto had a cost of $900,000 in 2022, but for this year its price is more than $2,000,000. This means that insurance, which previously could cost less than a current minimum wage, can now command a very high price ranging from $2,220,000 and the $10,000,000.

According to the president of the National Association for Sustainable Mobility, Andemos, this is a problem that is affected in the quotation and validation of vehicles carried out by insurers at the time required by the motor vehicle policy.

Factors such as the age of the insured, their marital status and the history of fines are added to the study of all-risk insurance. – Photo: Getty Images

However, the prices of the cars rose between 20% to 40%, which means that your tax base also has an increase. For example, if the car was worth $50 million, it currently costs $70 million, the insurance value is quoted as the last dollar,

Although it is true, the study of all-risk insurance adds factors such as the age of the insured, their marital status and their history of fines.