Starting from January 2025, a new edition of the law «On Mandatory Insurance of Civil Liability of Owners of Ground Transport Vehicles» will come into force in Russia. This law, commonly known as OSAGO, aims to protect the rights and interests of citizens involved in road accidents by ensuring compensation for damages caused by ground transport vehicles.
The current version of OSAGO, which has been in effect since 2003, has played an important role in regulating the insurance market and protecting the rights of road users. However, with the increase in the number of vehicles on the roads and the growing complexity of traffic situations, the need for updates and improvements has become obvious.
The new edition of the law was adopted by the State Duma, the lower house of the Russian Parliament, in July 2024. It was developed based on extensive research and consultations with insurance companies, legal experts, and road safety organizations. The main goals of the new edition are to improve the quality of insurance services, increase the level of protection for road users, and reduce the burden on insurance companies.
One of the main changes in the new edition is the introduction of a bonus-malus system, which will allow insurance companies to adjust the insurance rates based on the driver’s accident history. This system will encourage responsible driving and will reward those who have a good track record of safe driving. On the other hand, drivers with a history of accidents will have to pay higher insurance premiums, thus creating an incentive for them to drive more carefully.
Another significant change is the expansion of OSAGO coverage to include new types of damage. In addition to the mandatory coverage for personal injuries and damage to third-party property, the new edition will also cover damages caused by natural disasters, terrorist acts, and theft of the vehicle. This will provide more comprehensive protection for victims of road accidents and will make the insurance coverage more relevant to the current realities.
Moreover, the new edition of OSAGO introduces a requirement for insurance companies to offer electronic policies. This will simplify the process of purchasing and renewing insurance for vehicle owners and will reduce the administrative burden for insurance companies. It is expected that this measure will also contribute to the development of a more competitive insurance market in Russia.
To ensure the effective implementation of the new edition, the law also includes measures to increase the responsibility of insurance companies. They will be required to adhere to stricter standards and face severe penalties for violations. This will improve the quality of insurance services and strengthen the trust of consumers in the insurance market.
The implementation of the new edition is expected to have a positive impact on the overall road safety situation in Russia. By encouraging responsible driving and providing more comprehensive coverage, the law will contribute to reducing the number of accidents and improving the protection of road users.
Many experts have praised the changes in the new edition of OSAGO, calling it a significant step towards creating a more effective and fair system of insurance. The law has received support from various stakeholders, including insurance companies, consumer rights organizations, and government agencies.
In conclusion, the new edition of the law «On Mandatory Insurance of Civil Liability of Owners of Ground Transport Vehicles» is a timely and positive development for the Russian insurance market. It will improve the quality of insurance services, provide more comprehensive protection for road users, and promote responsible driving. We can expect to see a more competitive and efficient insurance market in Russia as a result of this new edition.
