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What determines the cost of MTPL insurance
Compulsory motor TPL insurance is a mandatory type of car insurance. Policy rates are set by the state. All insurance companies in Ukraine use the same calculation algorithm. While exchanging opinions, drivers find out that one vehicle owner purchased a motor third party liability insurance policy for a thousand hryvnias, while the other spent one and a half thousand. Why does the final cost differ with the same basic rates?
What is included in the cost of CTP insurance
The calculation takes into account
- type of vehicle. MTPL insurance for a motorcycle is cheaper than for a car or truck;
- carrying capacity, engine size. The higher these parameters are, the higher the cost of the compulsory insurance policy;
- place of registration of the vehicle;
- peculiarities of operation (personal vehicle, commercial vehicle);
- the period for which the CMTPL is issued. The standard period is one year. If this period is reduced, the cost increases per insurance day;
- the amount of the deductible. The higher the deductible, the cheaper the CTP insurance;
- whether the car owner has any benefits.
The dependence of the price of motor third party liability insurance on the region of car registration is explained by an assessment of the probability of an accident. Kyiv, Kharkiv, Dnipro have heavy traffic, a large number of vehicles on the roads, and a high probability of accidents. The most expensive MTPL insurance is available here. In rural areas and district centres, it is much lower.
You should be wary of inexpensive offers with a high deductible. After all, the car owner will have to cover this amount from his own funds.
Some insurers offer additional options, such as extended MTPL. This option is chosen by drivers who want to minimise their costs in the event of serious accidents involving expensive cars. Standard coverage is not enough to cover their repairs.
How is the price of CTP insurance formed?
No one calculates the cost of each insurance policy manually. It is calculated by computer programs based on the specified parameters. Online calculation calculators work in a similar way.
The basic formula is as follows: the UAH 180 rate is multiplied by correction factors. The basic rate is set by the National Bank. Surcharges are applied in full or in part. It is up to the insurance company to decide. For example, when calculating the amount of MTPL insurance for Kyiv, the basic rate is multiplied by a coefficient in the range of 3.2-4.8. For Irpin, Bucha, Dnipro, it is 2.3-3.5. This explains why different insurance companies have different price offers.
There are 9 correction factors in total (K1-K9). The first seven reflect the cost formation factors described above. K8 was introduced in conjunction with remote sales channels. When drawing up a paper document in the office, the calculated price does not change, since K8 is equal to one. For online paperwork, the K8 is 0.9, which means a saving of about 10%.
The bonus-malus coefficient reflects the presence or absence of insured events during the period of validity of the motor third party liability insurance contract. Accurate car owners with a restrained driving style will benefit.
Benefits affecting the cost of CTP insurance
The privileged categories of Ukrainian citizens who can take out CTPCI at a reduced cost include
- pensioners (provided that the car belongs to the insured and is used by him/her)
- disabled people of group II;
- war veterans;
- participants of liquidation of the Chernobyl disaster of I and II categories.
They pay half of the calculated cost. Disabled persons of group I who are able to drive a vehicle independently take out MTPL insurance free of charge. A similar benefit is available to combatants, disabled veterans, and people who suffered during the Revolution of Dignity and were disabled during the hostilities. If an insured event occurs through the fault of a citizen belonging to one of the categories, the MTIBU indemnifies third parties for losses.
In order to take advantage of the benefits, when applying for a policy, you must present supporting documents: certificates, certificates. Preferential terms of registration do not apply to some vehicles. These are taxis, trucks, trailers, and buses.
Privileged categories of citizens can buy CTPCI in the same places as other drivers. That is, in the offices of insurance companies, online, on official websites.
In addition to the fact that it is approved by law, all drivers are interested in buying CTPCI. It is impossible to predict situations on the road. The cost of the policy is ten times lower than the costs that the culprit of the accident will have to incur when independently compensating the victims of an accident and paying a fine for not having a CTP policy. If you have a motor third party liability insurance policy, the insurance company will indemnify you for any damage caused to the health, life or property of third parties. The smart choice is obvious.
When choosing an insurance provider, you should focus not only on price offers. The percentage of successfully settled insurance claims, the ratio of positive feedback to customer complaints, and payout rates should also be considered. This information is publicly available from reputable insurance companies.
