The Ministry of Justice of Russia has registered an instruction from the Central Bank to expand the OSAGO tariff corridor by 26% in both directions. Therefore, it will come into effect on September 13. According to the document, for passenger cars, the basic rate of mandatory civil liability insurance will be in the range of 1,646-7,535 rubles. In theory, a specific insurance company sets a personalized rate for each specific buyer of the OSAGO policy.

In theory, the basis for such a decision should be the probability calculated by the insurer that the client will become the culprit of the accident. Therefore, for emergency responders, the cost of a car citizen will be high, and for a trouble-free “mate” – low. However, this arrangement only works in the world of castles in the air created by the insurance lobby. In practice, insurance companies “increase” the cost of OSAGO for all customers in general to maximize profits.

“The Bank of Russia expects this to help curb the price hike for OSAGO as there will be more opportunities for differentiation,” the regulator said in an official statement.

The Central Bank states that “the price situation is already starting to stabilize in August – despite payment growth, the average premium has fallen for the first time since the beginning of the year.” Translated into Russian, this means that only in August insurers stopped blatantly accelerating price increases for OSAGO. Well, with the 26% expansion of the tariff corridor, they will have the opportunity to restart the policy price increase process.

The Ministry of Justice of Russia has registered an instruction from the Central Bank to expand the OSAGO tariff corridor by 26% in both directions. Therefore, it will come into effect on September 13. According to the document, for passenger cars, the basic rate of mandatory civil liability insurance will be in the range of 1,646-7,535 rubles. In theory, a specific insurance company sets a personalized rate for each specific buyer of the OSAGO policy.

In theory, the basis for such a decision should be the probability calculated by the insurer that the client will become the culprit of the accident. Therefore, for emergency responders, the cost of a car citizen will be high, and for a trouble-free “mate” – low. However, this arrangement only works in the world of castles in the air created by the insurance lobby. In practice, insurance companies “increase” the cost of OSAGO for all customers in general to maximize profits.

“The Bank of Russia expects this to help curb the price hike for OSAGO as there will be more opportunities for differentiation,” the regulator said in an official statement.

The Central Bank states that “the price situation has already started to stabilize in August – despite payment growth, the average premium has fallen for the first time since the beginning of the year.” Translated into Russian, this means that only in August insurers stopped blatantly accelerating price increases for OSAGO. Well, with the 26% expansion of the tariff corridor, they will have the opportunity to restart the policy price increase process.