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Tuesday 21.11.2017 | Name days: Andis, Zeltīte
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Changes in OCTA law enable receiving indemnity from one's own insurer

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Baltic news, News from Latvia, BNN-NEWS.COM, BNN-NEWS.RUThe direct loss regulation (DLR) system, stipulating that owners of cars damaged in road traffic accidents receive a compensation from their insurer, will facilitate Latvian vehicle owners’ life, while the newly-adopted provision in OCTA Law will force insurers boost the quality of their services, considers the Latvian Vehicle Insurance Bureau (LVIB) Board Chairman Juris Stengrevics.

The DLR is based on voluntary and OCTA-licensed principles that are mutually agreed upon between insurance companies. The DLR system determines that damages are first estimated and paid by the insurer, who has insured the injured party’s civil liability, but afterwards the insurance compensation is recovered from the guilty party’s insurer. However, the  amendments adopted by the Cabinet of Ministers will not be compulsory for insurance companies, but voluntary, giving drivers the opportunity to choose their insurer, not just according to the price of the offered OCTA policy, but also based on many other components: service, loyalty, attitude, reputation, etc.

The Latvian transport owners will definitely benefit from the introduction of the DLR system, because the newly-implemented procedure will facilitate disagreements settlement between the policyholders (clients) and insurers, increasing the offered service quality, Stengrevics notes. At the same time the damage claim procedure will be made simpler for the victim. For instance, when buying OCTA policy, we usually choose a preferable insurance company and go to its nearest branch, he says.

At the moment, in case of a road accident, the victim has to turn to the insurer of the guilty party; yet, the company may be located far from the injured party’s place of residence or work. The new procedure provides that after the road accident the injured party can contact their insurer to solve all the issues connected to filing and processing the insurance claim, as well as to receive the insurance indemnity, informs the LVIB Board Chairman, noting that further on the injured party’s insurer will provide the adjustment of formalities and obtain the compensation from the guilty party’s insurance company.

The DLR system has been implemented in many European countries: France, Belgium, Italy, Spain, Portugal, etc., Stengrevics informs.

The DLR is one of the most important novelties implemented in the OCTA Law amendments. After these amendments come into force, insurers will be able to agree on the DLR on a voluntary basis, meaning that, in case of an accident, the injured parties will be able to turn to their OCTA insurers, even without a CASCO policy, says the insurance company BTA SE Board Member Jeļena Alfejeva.

The same opinion is also expressed by the company If P&C Insurance, which believes that, similarly to the banking business, trust is very important in insurance. The DLR system will enable building the insurer–customer relations without any neglect, as the provision of a higher quality service is the insurer’s obligation, because an OCTA client will now be a long-term policy holder, rather than a single policy term client.

The amendments to the OCTA Law will come into force after the Saeima voting in the coming months.


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