The driving “record” brings higher MTPL prices for careless drivers

Bonus-malus is a system by which drivers will be able to pay a lower (bonus) or a higher (malus) tariff when renewing their MTPL policy, depending on the number of damages registered in the previous year of insurance. Practically speaking, once this system is introduced, insurance companies will have access to the first database which records the history of the behavior of drivers in Romania.

“Until now, when the insurance company applied malus for a driver with several damages, he would run to another company to get a better price. As of January, this will no longer be possible, and the tariffs, at least on the MTPL segment, will be set equitably - drivers with several damages will pay more, while those with no accidents will pay less,” the General Manager of the SRBA insurance broker, Gheorghe Grad, said.

The two types of auto insurance generate the highest losses for insurance companies, considering that the damage rate for MTPL and Casco, at the market level, has been between 75 and 80 percent for years.

“Insurance companies are expecting a decline in the damage rate, once the bonus-malus system is introduced,” said Bogdan Andriescu, President of the National Union of Insurance Bokerage and Consultancy Societies from Romania (UNSICAR).