Vietnam: How much is the maximum compensation amount covered by motorcycle insurance in 2023?
- How many types of motorcycle insurance in Vietnam are there?
- Who are the beneficiaries covered by motorcycle insurance in Vietnam?
- How much is the compensation amount covered by motorcycle insurance in Vietnam? What is the formula for calculating the compensation amount?
- What are the procedures for receiving compensation amounts covered by motorcycle insurance in case of traffic accidents in Vietnam?
How many types of motorcycle insurance in Vietnam are there?
Currently, there are 03 types of insurance:
- Compulsory civil liability insurance for vehicle owners. This type of compulsory motorcycle insurance is regulated by the Road Traffic Law, and the operators must present it at the traffic police's request.
The selling price of compulsory motorcycle insurance is applied according to Appendix 1 issued together with Circular 04/2021/TT-BTC as follows (excluding 10% VAT): Two-wheeled motorcycles under 50cc, Electric mopeds: 55,000 VND/year; Two-wheeled motorcycles over 50cc: 60,000 VND/year; The remaining mopeds and similar vehicles: 290,000 VND/year.
- Accident insurance for vehicle occupants. This type of insurance is intended to protect riders in the event of an accident. Vehicle owners can buy insurance for the operator or for the rear occupants as well. This type of insurance is voluntary. Therefore, it will not be legally valid if the traffic police check the documents.
- Automobile body insurance. This type of insurance is not applicable to motorcycles. And this is also voluntary insurance, and at the same time, it is not legally valid when the authorities require a document check-up.
Who are the beneficiaries covered by motorcycle insurance in Vietnam?
Pursuant to Clause 1, Article 14 of Decree 03/2021/ND-CP, the beneficiaries of compensation from insurance companies in Vietnam are:
- Motor vehicle owners or operators with civil liability who are insured shall be refunded the amount that they have already compensated or must compensate for victims.
- The victims or their heirs (death of the victims) or their representatives: shall be compensated by insurance companies if the insured dies.
- In case, the error comes entirely from a third party, insurance companies only compensate up to 50% of the prescribed level.
How much is the compensation amount covered by motorcycle insurance in Vietnam? What is the formula for calculating the compensation amount?
According to point a, clause 3, Article 14 of Decree 03/2021/ND-CP, the current insurance liability rate for damage to health and life caused by motorcycles is VND 150 million/person/accident. Depending on the seriousness of the injury, damage, or as agreed by the parties, the amount will be paid by the insurance company, but must not exceed 150 million VND.
- At the same time, based on Appendix I issued together with Decree 03/2021/ND-CP, the compensation amount is determined as follows:
* Damage to health and life
- The person who suffers from damage dies or suffers brain damage causing vegetative sequelae: the maximum compensation amount is 150 million VND
- Compensation according to the seriousness of injury: The compensation amount is calculated according to the following formula:
Compensation amount = Injury Rate x insurance liability rate
Where:
The injury rate is applied to the skull and nervous system lesions:
+ Touch the skull: The respective injury rate is 6% - 10%.
+ The diameter or length of the fracture is less than 3cm, the electroencephalogram has a lesion corresponding to the injury rate from 11% - 15%
+ A skull with a diameter or length of 3 cm or more, an EEG with a lesion corresponding to an injury rate of 16% - 20%
+ Loss of lateral plate bone, area less than 3 cm2, EEG with lesion corresponding to injury rate from 16% - 20%
+ Loss of lateral plate bone, the area from 3cm2 or more, EEG with focal lesion corresponding to injury rate from 21% - 25%
+ Solid craniofacial defects with an area of less than 3 cm2, electroencephalograms with lesions corresponding to the injury rate from 21% - 25%
+ Solid craniofacial defects with an area of 3 to 5 cm2, electroencephalograms with lesions corresponding to the injury rate from 26% - 30%
Example: Loss of lateral bone at the rate of 18%, compensation: 18% x 150 million VND = 27 million VND
* Property damage
- Pursuant to Clause 2, Article 4 of Circular 04/2021/TT-BTC, the insurance liability rate for property damage caused by a motorcycle is VND 50 million/accident.
- And based on Point b, Clause 3, Article 14 of Decree 03/2021/ND-CP: The compensation amount for damage to property/accident is determined according to the actual damage and the degree of fault of the insured, but not exceeding the insurance liability (VND 50 million).
What are the procedures for receiving compensation amounts covered by motorcycle insurance in case of traffic accidents in Vietnam?
- Step 1: Notify the insurance company (Clause 2, Article 16 of Decree 03/2021/ND-CP)
Within 5 working days from the date of the accident (except in case of force majeure), the policyholder or the insured must send the accident notice in writing or via electronic form to the insurance company.
- Step 2: Assess (Clause 1 Article 12 of Decree 03/2021/ND-CP)
+ The assessment results must be made in writing and signed by related parties.
+ Damage assessment costs are paid by the insurance company.
- Step 3: Receive advance insurance compensation (Clause 2, Article 14 of Decree 03/2021/ND-CP).
* For damage to health and life, within 3 working days from the date of receipt of the notice of the policyholder or the insured about the accident, the insurance company must advance compensation for damage to health and life, specifically:
+ In case the accident is determined to be within the scope of damage compensation: 70% of the prescribed insurance compensation/1 person/1 case for death, 50% of the prescribed insurance compensation/1 person/1 case for emergency treatment organ injuries.
+ In case the accident within the scope of damage compensation has not been determined: 30% of the prescribed insurance liability/1 person/1 case for death, 10% of the prescribed insurance liability/1 person/1 case for emergency treatment of organ injuries.
Step 4: File a compensation claim.
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