bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Ceturtdiena 20.09.2018 | Name days: Marianna, Ginters, Guntra

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.

20 complaints received in first 10 days of data protection regulation

In the first 100 days since adoption of European General Data Protection Regulation, Latvia’s Data State Inspectorate has received 20 data protection violation reports, said the centre’s director Daiga Avdejanova during a meeting of Saeima’s European Affairs Committee.

Ministry: non-banking lenders should assess clients’ solvency more carefully

Although certain improvements have been noticed in the industry, Latvia’s Economy Ministry invites amendments to make non-banking lenders perform more careful evaluation of clients’ solvency and allow creditors exchange information with one another.

Saeima argues over request to assess attempts to cancel «morality amendments»

During a meeting of Saeima’s Inquiry Committee, certain members and NGO representatives exchanged harsh words on Saeima opposition deputies’ request to Prime Minister Māris Kučinskis on association Papardes zieds’ protection of interests for the cancellation of so-called morality amendments.

EU residents believe European authorities should be more involved in certain areas

According to results of European Parliament’s Eurobarometer study, published eight weeks prior to elections in EU, residents believe European authorities should be more involved in certain matters. Priorities include terrorism threats, unemployment and environmental protection.

Estonian internet user growth strongest among elderly

The share of internet users in Estonia has continued to grow in 2018 and has over the past three months increased the most among 65–74-year-olds, official statistics show.

Regulator invited to assess calculation of electricity transmission tariff

Conclusions made by State Audit in relation to tariffs employed by Sadales tīkls show that recommendations received from OECD a couple of years ago in relation to public service tariff calculation should be carefully considered and adopted to ensure balance the interests of consumers and service providers.

Latvian police points towards stagnation in road traffic safety

So far this year 91 people have died in road traffic accidents in Latvia. According to State Police Road Traffic Safety Office Chief Normunds Krapsis, stagnation is present for road traffic safety.

Latvian government to attract EUR 29.5 million to restore Latgale’s degraded territories

On Tuesday, 18 September, Latvia’s Cabinet of Ministers supported the action plan for Latgale region’s economic growth 2018-2021, which provides for attracting of EUR 29.5 million to help restore the region’s degraded territories.

China announces retaliatory tariffs on U.S. goods, seeks free trade support

Beijing has stated it would impose a duty tariff increase on American imports worth 60 billion U.S. dollars in a reaction to Washington's announcement to add tariffs on imports from China worth 200 billion U.S. dollars.

Montenegro to join NATO battalion stationed in Latvia

According to NATO Deputy Supreme Allied Commander in Europe James Everard, Montenegro plans to join the multi-national battalion currently stationed in Latvia.

U.S. looking seriously at Poland's request for American base on its soil

U.S President Donald Trump has noted the country was looking seriously at a request from Poland for a permanent U.S. military base in the fellow NATO member state and agreed that Polish concerns about possible Russian aggression were shared.

Russian plane near Syria shot down by ally targeting Israeli planes

The Russian military plane, which went missing on Monday, has been shot down by its ally Syria targeting Israel's war planes and the number of servicemen lost in the event has been corrected from 14 to 15, the Russian government stated.

Latvian border guards find more than 140 kg of hashish in a car

On 16 September, Latvian State Border Guard detained a 1991-born man and his car at Grebnev border checkpoint. A secret compartment containing 145.3 kg of narcotic substances was found in his car during a routine inspection, as reported by State Border Guard.

EU suspects German car-makers of colluding against cleaner technology

EU competition watchdogs are probing if German automotive giants have colluded to restrict the development of clean emission technology.

Number of job vacancies in Latvia up 7.8 thousand in Q2 2018

In Q2 2018 there were 24.5 thousand job vacancies in Latvia, which is 7.8 thousand vacancies or 46.6 % more than in Q2 2017. In public sector there were 7.2 thousand and in private sector 17.3 thousand job vacancies.

Latvian government desperate to resolve the growing piles of used tires problem

Latvian government has supported Environment Protection and Regional Development Ministry’s prepared report ‘On maintenance of used tires’. This report includes proposals for measures to help resolve the matter regarding speeding up recycling and regeneration rates, as well as the no less important matter of maintenance of used tires.

Cargo volumes handled by Latvian ports remain stable in first half-year of 2018

Latvian ports transshipped 43.468 million tonnes of cargoes in the first eight months of 2018, which is 0.9% more than in the same period of last year. According to data from Transport Ministry, cargo turnover’s negative balance continues declining at Ventspils port, where 13.274 million tonnes of cargoes were transshipped in the first eight months, which is a drop of 11.9%.

airBaltic carried 18% more passengers in summer

Latvian airline airBaltic has carried 2,770,047 more passengers to destinations in Europe, Scandinavia, Russia, CIS and the Middle East in the first eight months of 2018, BNN was told by the company.

Ukrainian workers in Lithuania gradually fill gap left by Lithuanian exodus

Companies in Lithuania, in particular operating in construction, logistics and retail chains, are increasingly inviting workers from Ukraine and Belarus to fill the worker shortage of Lithuanians moving to richer countries.

ABLV Bank assets worth EUR 47.14 million recovered in August

Assets worth EUR 47.13 million were recovered from the liquidated ABLV Bank in August, which is 2.2 times more than a month prior, according to the account published in Latvian Herald.

Estonia bank watchdog points to Denmark's responsibility over Danske

As to the allegations of doubtful billions flowing via the Estonia branch of Danske Bank, the Estonian watchdog of financial institutions has noted that the Danish supervisory authority was responsible for the lender's risk control.

Liepaja City Council vice-chairman steps down

On Monday, 17 September, Liepaja City Council vice-chairman for tourism and investment affairs Ģirts Kronbergs announced his resignation.

Sixteen contenders apply for Rundale Castle Museum director’s post

A total of sixteen contenders have applied for participation in Latvian Culture Ministry’s announced open personnel selection process to find the next director of Rundale Castle Museum.

Russia: Military plane with 14 Russian soldiers has been lost near Syria

A Russian war plane with 14 servicemen on board has disappeared while over the Mediterranean Sea near the coast of Syria, Russia's Defence Ministry has stated.

Unity decides not to support UGF’s initiative for people’s elected president

Unity political party has no plans to support the amendments submitted by the Union of Greens and Farmers on people’s elected president, says Unity’s chairman Arvils Ašeradens.

Newest comments