Serbia-Bonus of 30% on auto liability minimal premium cancelled - automobile insurance more expensive by 40%

Starting from April 4, 2005, compulsory automobile insurance will be more expensive by about 40%. The price of the insurance will not rise through direct increase in prices, but through cancellation of possibility the insurance companies used to use in order to give the bonus of 30% of auto liability minimal premium to their clients. Discount of 30% was supposed to serve as reward to the clients who were good drivers, but, in practice, most of the companies, in order to be more competitive, used to give bonuses to the all insured.

Administrative Board of the Union of Insurance Companies of SCG made the decision on cancellation of application of regulation from the item 3 in the Tariffs of premiums for insurance of owners of motor vehicles from the liability to the damage caused to the third persons, which implies possibility for reduction of premium up to 30% and increase in premium up to 60%

Administrative Board asked the Ministry of Internal Affairs not to accept registration of prolongation for the vehicles for which premium was lower than the minimal one. The decision was also delivered to the National Bank of Serbia as information on measures for overcoming of problems made by taking away of working permits from certain number of the insurance companies.