Vehicles that have been involved in many accidents will be subjected to higher insurance premiums if insurance firms adopt a new pricing strategy.
Under the proposed risk-based being planned by the Rwanda Insurers Association and the National Bank of Rwanda, vehicles with low accident records will be charged lower premiums, reported The New Times.
Insurance firms are expected to meet in the next few weeks to discuss the tariffs including bonuses and penalties under the proposed policy, which could come into force in January next year, said Mr Jean-Pierre Majoro, executive secretary of the Rwanda Insurers Association.
Insurers argue that they making losses on motor vehicle insurance due to low premiums and high claims
Mr Majoro said, “There is no point in charging the same insurance premiums to the person who behaves well and the one who frequently causes accidents.”
The strategy also proposes bonuses for “disciplined drivers” and fines for “errant” ones.
“This means that the premiums that you paid last year on the same risk and car will not be the same…there will be a given percentage reduction (if your car was not involved in an accident),” he said.
Insurers will have access to a centralised online system with information about all insured vehicles, he disclosed.
Currently, he said, when a car causes an accident and the insurer wants to penalise it, the vehicle owners simply go to another insurance firm, which welcomes them as a client.
“But, we are addressing such a challenge through a centralised data system. If the person goes to another insurer which welcomes them, they will be punished,” he said. “An insurer who receives the offender and gives them insurance cover without a fine will pay the price.”
Rwanda’s insurance sector has 14 companies of which 12 are private insurers.