bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Sunday 18.02.2018 | Name days: Kintija, Kora

Latvia Motor Insurers’ Bureau: car owners prefer reimbursements in cash

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Along with the economic downturn the number of road traffic accident victims – vehicle owners – who prefer receiving indemnity in cash, not as insurer’s paid repair service, is growing admitted the experts at Motor Insurers’ Bureau of Latvia (MIBL).

«Such trend can be to some extent explained by a desire to economize, because usually in such cases, the owners of damaged vehicles repair the car by themselves or choose to repair it at low quality services at much lower costs. Besides, it is possible that such auto services do not pay taxes,» indicated the Chairman of MIBL Board Juris Stengrevics.

He added if the car lesions are small, often they are not repaired at all. «It should be mentioned that this tendency is contrary to the pre-crisis period, when in most cases victims chose a prepaid service because it was easier and required less involvement, as well as guaranteed quality.»

In line with the Compulsory Civil Liability Insurance of Owners of Motor Vehicles Law (OCTA law), in case of road traffic accidents the damaged vehicle owners can receive payments for suffered losses in two ways: a prepaid service for the repair of a vehicle, or in cash, which is self-evident in vehicle death cases, but there is a right of selecting damage repair options.

Namely, if the indemnity claimer chooses to receive a cash settlement, then insurer is not responsible for the vehicle repair – car owners themselves have to ensure it.

MIBL indicated the reimbursement process in this case will be longer. Currently, if the damaged vehicle owner and insurer of the driver who caused the accident negotiate about the car service where the repair works will be carried out, then immediately after the accident, when the vehicle inspection has been done and the service estimate is adjusted with the insurer, the repairs may be undertaken. Whereas, if the damaged vehicle owner chooses to receive a cash reward, then, in accordance with the law, besides carrying out the vehicle inspections, the preparation of a loss calculation by an expert is necessary on the basis of which the insurer determines the amount of refund. It should also be noted that in line with OCTA statutory, insurers have to take decisions about the cost within a period of one month after all the required documents are received.

In addition, if the indemnity is received in cash, the damaged vehicle owner must take into account that compensation can be paid excluding the value added tax amount, as the service – a car repair – was not carried out.

The European countries’ practice has shown that insurer pays the insurance reimbursement in cash only in cases when the vehicle repair is economically unsound and the losses related to vehicle death are reimbursed. Insurance indemnity as cash payment is theoretically possible also in cases when the vehicle has not been significantly damaged, but then the vehicle owner has to keep in mind that a significantly smaller sum will be paid because taxes will be deduced from the actual calculated sum and the reduction will be based on the operational depreciation.

J. Strengevics points out: «In line with OCTA law, insurer’s task is to cover losses at such extent to ensure the restoration of vehicle. Respectively, if the vehicle is 10 years old, insurer’s task is to cover repair expenses to ensure the restoration at the pre-accident level. By choosing indemnity in cash, the losses are covered in accordance with expert’s calculations, where the price of spare parts is adjusted to the operating depreciation. This is one the main reasons for insurers and damaged vehicle owners’ disagreements, because the victim claims that insurer has to cover losses at the extent of a new car or new spare parts, despite the car’s true age.»

If insurer concludes that the repair costs of damages that the vehicle suffered in the accident exceed the car’s value before the accident, the vehicle owner will receive the compensation in cash.


Leave a reply

  1. Ren says:

    Money always creates the feeling of stability, no wonder car owners prefare payments in cash, and they can further choose the service.

    Thumb up 0 Thumb down 0

Week in Lithuania. Lithuania celebrating centennial of statehood

Leaders of European countries gathered in Vilnius on Friday, February 16, to celebrate the 100-year anniversary of restored statehood, and festive events were taking place in many cities and towns of Lithuania.

BNN summary of the week: minister threatened with dismissal; ABLV Bank scandal

BNN offers a summary of this week’s topical news in a variety of categories: Change; Fight; Court; Problem; Decline; Commentary; Future; Proposal

SRS uncovered violations in 169 inspections at catering companies last year

In 2017, the State Revenue Service (SRS) performed a total of 989 inspections at 212 catering companies. This includes 182 thematic inspections for 125 taxpayers. Violations were uncovered in 169 inspections. The most common violation was manipulation with cash registers, according to information published by SRS.

Russian tourists often decide to celebrate International Women’s Day in Riga

To satisfy growing demand for bus tickets from Russia to Latvia for the week when 8 March is celebrated, Lux Express plans to organize additional buses between St Petersburg and Riga.

FCMC to investigate ABLV Bank again; no operational restrictions applied to the bank

Latvia’s Finance and Capital Market Commission (FCMC) has plans to perform an additional investigation at ABLV Bank in the next couple of weeks, says the commission’s manager Pēters Putniņš, adding that no operational restrictions have been applied to the bank so far.

Study: overall sense of happiness in Latvia is record-low

60% of Latvian residents feel happy. Although this is a good index, there has been a general decline of the sense of happiness, according to a study performed by Amigo mobile network operator and SKDS to assess the level of happiness of Latvian residents.

Raid reveals some taxi drivers in Riga do not have valid driver’s license

A raid was performed by the State Revenue Service and Riga Municipal Police to check taxi service providers in the capital. Authorities uncovered a total of 81 violations in 48 cases, BNN was informed by SRS.

Estonia sea ice crash: last missing body found

Nine days after a van with six people inside drove onto the ice of the Baltic Sea in south-western Estonia, the body of the last victim has been found.

Delna invites immediate investigation of claims about ABLV Bank’s money laundering schemes

The decision by US Finance Ministry’s Financial Crimes Enforcement Network (FinCEN) to apply sanctions against ABLV Bank for involvement in money laundering schemes and bribery of officials was not a surprise. It is a sign for acute need to continue improving investigative and supervisory institutions’ ability to prevent money laundering through Latvia, as noted by Delna – Society for Openness.

Estonian income tax should be simplified, parties believe

The existing income tax scheme in Estonia should be simplified, three parties in the Estonian Riigikogu find, but there are differences in opinion as to maintaining the current state budget income. Meanwhile, the opposition Reform Party has voiced backing for an annual tax-free income of 6,000 a year to every earner.

Baltics propose increasing member states’ contributions to EU budget after Brexit

Latvia, Lithuania and Estonia invite European Union member states to increase contributions to the EU budget after 2020 in order to make sure available funds do not drop after UK’s exit.

Instagram obeys Russian internet censor to block content on corruption allegations

In the atmosphere of the March Russian presidential election, social network Instagram has submitted to the demands of Russia's internet censorship body and blocked in the country content with corruption claims voiced by Russian opposition figure Alexei Navalny.

Teenager charged with U.S. school shooting has confessed

A day after a tragic school shooting in Florida, the U.S., where 17 people have been killed, the suspect 19-year-old Nicolas Cruz has confessed to police.

Snowfall expected for weekends in Latvia; sky to become clear again next week

On Friday, 16 February, weather in Latvia will be dictated by a small cyclone, which will approach the country from Sweden. Because of that, the sky will be cloudy and snowfall will come to many areas. The cyclone will not be strong. With that, wind speed will remain relatively slow, as reported by Latvian State Environment, Geology and Meteorology Centre.

How will Lithuania look like in another 100 years?

In order to tell it, one needs to know the past and the presence. Yet the predicting how the centennial celebrations-engulfed Lithuania will look like in another hundred years is not easy at all even for political and business pundits.

Minister: Latvian authorities will perform an investigation about FinCEN report

Responsible Latvian institutions will perform an investigation in relation to the report from US Finance Ministry’s Financial Crimes Enforcement Network (FinCEN). In this report, the institution accuses ABLV Bank of bribing Latvian officials, says Foreign Affairs Minister Edgars Rinkēvičs.

Party calls for extraordinary meeting of Riga City Council’s Transport Committee

To invite officials to explain the illegal decision in regards to the mutual agreement between Rīgas satiksme’s and Rīgas mikroautobusu satiksme’s, political party For Latvia’s Development urges opposition factions of Riga City Council to call an extraordinary meeting of the Transport Committee, as confirmed by the party.

Meteorologists warn about -25° C frost in Latvia in March

Global Forecast System predicts a possibility of -25° C frost in Latvia’s eastern parts at the beginning of March.

Latvian residents remain dissatisfied with their families’ financial state

For several years in a row the majority of Latvian residents remain dissatisfied with their families’ financial state, according to results of Baltic International Bank Latvian Barometer.

Latvia’s cosmetics market – 160 million euros

Latvia’s cosmetics market is worth approximately EUR 160 million. Similar to Europe, skin and hair care products are the most popular ones. The smallest market proportion is occupied by decorative cosmetics, according to data from Latvian Cosmetic Manufacturers Association (LCMA).

RB Rail CEO says interference «from above» has been in line with the law so far

We have seen interference «from above» in RB Rail’s activities. The law was not breached, however. With that, there was no need to report anything to law enforcement institutions, RB Rail CEO Baiba Rubesa told Ir magazine.

15 Estonians die in flu period from complications

The number flu patients in Estonia is currently increasing. So far during this year's flu season, 15 people have passed away with flue-related complications.

Economy Minister asked to fix increasing electricity bills; parties threaten with dismissal

Latvian Economy Minister Arvils Ašeradens has to fix the mistakes that have caused electricity bills to increase, said chairman of Free Trade Union Confederation of Latvia Egils Baldzēns in an interview to 900 seconds programme of LNT.

Third of beer consumed in Estonia in 2017 bought in Vidzeme, Estonian factory breweries evaluate

Saku and A. Le Coq, two largest beer makers in Estonia have not published their exact sales numbers for the last year, but have been quick in stating that about one third of all beer drunk in Estonia was purchased in Latvia.

U.S. hit by another mass shooting at school

In the U.S., a high school has been attacked in the state of Florida, where gunshots have taken the lives of 17 people. Local police has detained a suspect – a 19-year-old man, who had been expelled from the same school.

Newest comments