News Middle East02 Sep 2020

Morocco:Insurers postpone implementation of proposed change to deductibles in motor insurance

| 02 Sep 2020

Several insurers have postponed the start of a change to the terms of comprehensive motor insurance concerning deductibles. The proposed change is aimed largely at rental vehicles and luxury cars.


Previously, insurers in the kingdom decided unanimously on making the change that was to have taken effect on 1 September for new motor business. This change, which was made amidst the COVID-19 health crisis, was to apply from 1 October 2020 for renewals.

Under the change, the calculation of the deductible will no longer take into account the value of the damage but rather the replacement value of the insured vehicle, according to local media reports. This is a reform which aims to contribute to the technical recovery of the automotive industry.

An executive of an insurance company operating in the Moroccan market said that this decision was taken by all the companies which will apply the change all in the same way and at the same time.

The minimum deductible of "damage to the vehicle" is set at 3% of the replacement value, with a minimum of MAD2,500 ($274). In addition, options are maintained for deductibles of 5% and 10%. This means that if the replacement value of a vehicle is MAD500,000, the minimum deductible would be MAD15,000.


However, the decision of insurers have attracted objections including allegations of anti-competitive behaviour from customers and consumer groups.



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