2024-02-14 13:04:00
The Capital Market and Insurance Authority may lead a far-reaching change in the insurance sector. According to the plan, the “total loss by law” insurance process will be abolished, in which the insurance company compensates its customers for the full price of the stolen vehicle, and it will have to repair the vehicles even if the cost is not affordable.
So how will it work? First, it is important to clarify: a normal “total loss” situation is such that it is obtained only in the event that the damage exceeds 60% of the vehicle’s value. In this situation, the vehicle goes off the road. In a situation of “total loss according to law” it is a damage that is less than 60%, but the damage is significant. In this situation, it pays for the insurance company to pay the full cost to the owner of the vehicle, because the repair costs more than the value of the vehicle after the damage.
Such a situation, in which she takes the vehicle off the road, is of course more profitable for the insurance company, but the fact that she transfers it to a car dealer causes future buyers to suffer a blow – they do not know that the vehicle was in this condition and if they conduct a comprehensive inspection when selling it, they may notice the problem.
So why is this actually a revolution? Because many times the insurance companies take care of repairing the vehicles using non-original spare parts. They lower the repair value, but this hurts future buyers. This thing causes the market for stolen parts to expand. Where is the problem? The prices of spare parts are very high today, which often means that it is not profitable for the insurance company to repair the vehicle. Therefore, a possibility arose to cancel the situation of “total loss in law”, and in its place, a car whose damage value is less than 60%, will return to its owner after repair. It seems that this proposal will be supported by the drivers, the policy holders, and also by the garage association who are well aware that the vehicles are sometimes repaired in an unauthorized garage in order to save money for the companies. Those who object are of course some of the insurance companies, who understand that in some cases they will pay more money for a repair than to take the vehicle off the road.
As part of the draft submitted by the Capital Market Authority, there is an option to oppose or support during until February 22, when on the 26th of the month the authority will hold a discussion on the issue and decide.
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