How many types of motor vehicle insurance are there in Vietnam? What is the purpose of motor vehicle insurance in Vietnam?

Hello, Lawnet would like to answer as follows:

1. How many types of motor vehicle insurance are there in Vietnam?

According to Clause 3, Article 4, Decree 67/2023/ND-CP stipulates participation in motor vehicle insurance as follows:

- In addition to participation in compulsory insurance in compliance with insurance conditions, insurance premiums, minimum coverage or maximum coverage prescribed herein, policyholders and insurers may negotiate additional insurance conditions, or increase in the coverage and insurance premiums in accordance with law. In this case, the compulsory insurance must be a separate part in the insurance policy.

- The state government shall encourage agencies, organizations and individuals that do not belong to entities required to participate in compulsory insurance under the provisions of this Decree shall buy compulsory insurance on the basis of arrangements with insurers and in compliance with regulations of law.

Note: In case the insurance buyer and the insurance company can agree in the insurance contract to expand insurance conditions, increase the insurance amount, and corresponding additional insurance premium, the insurance company is responsible for separating the compulsory insurance part of the insurance contract to comply with the law.

In which:

+ Compulsory insurance: is the insurance that meets the requirements of conditions, insurance amount, fees,... according to the provisions of Decree 67/2023/ND-CP.

+ Extended insurance: is the insurance in addition to the mandatory insurance, which is voluntarily agreed upon by both parties with terms that have a broader scope of protection.

 Thus, according to the above regulations, there are two types of motor vehicle insurance: mandatory motor vehicle insurance and voluntary motor vehicle insurance specifically:

- Compulsory motor vehicle insurance (Civil liability insurance for motor vehicles owners): This is a type of insurance that motor vehicles owners must participate in to protect public interests, the environment, and social safety. When an accident occurs, in principle, compulsory motor vehicle insurance does not compensate the motor vehicles owner but compensates for damages to the accident victim due to the motor vehicle owner's fault.

- Voluntary motor vehicle insurance: This is an optional type of insurance; road users can choose to buy or not buy voluntary motor vehicle insurance. However, if you participate in voluntary motor vehicle insurance, the motor vehicles owner will be compensated for property damage or personal injury (including the motor vehicles owner and passengers) in the event of an accident, fire, explosion, or theft. rob...

Depending on the type of insurance applied for, the scope of liability and compensation level will be different.

 2. What is the purpose of motor vehicle insurance in Vietnam?

According to the provisions of Clause 1, Article 7 of Decree 67/2023/ND-CP, purchasing motor vehicle insurance has the effect of compensating for non-contractual damages to health, life and property to third parties and passengers on the motor vehicles caused by motor vehicles participating in traffic and operating. Except for some cases where compensation is not provided in Clause 2, Article 7 of Decree 67/2023/ND-CP

In addition, the driver must carry the motor vehicle owner's Civil Liability Insurance Certificate when operating the vehicle as prescribed in Point d, Clause 2, Article 58 of the Law on Road Traffic 2008.

Therefore, motor vehicles drivers, when participating in traffic, must not forget to bring vehicle insurance. If the documents are checked by the Traffic Police and they cannot present motor vehicle insurance, the driver will be administratively sanctioned according to Point a, Clause 2, Article 21 of Decree 100/2019/ND-CP, amended by Decree 123/2021/ND-CP:

"2. A fine ranging from VND 100,000 to VND 200,000 shall be imposed upon:

a) Any person operating a motorcycle or moped and the like without carrying an unexpired certificate of civil liability insurance for motor vehicles; or"

Thus, buying compulsory motor vehicle insurance is also to avoid being fined for administrative violations when participating in traffic. If there is no motor vehicle insurance or there is but does not carry it, the vehicle driver will be fined from 100,000 - 200,000 VND.

3. motor vehicle insurance compensation level

According to Clause 6, Article 12, Decree 67/2023/ND-CP stipulates the compensation level for motor vehicle insurance as follows:

Compensation for health and life:

- The specific insurance compensation amount is determined according to each type of injury or damage or according to the agreement of the parties or the decision of the Court (if any), but does not exceed the prescribed level of insurance liability.

- Thus, the insurance liability level for health and life damage caused by motor vehicles is 150 million VND/person/accident. (According to Clause 1, Article 6 of Decree 67/2023/ND-CP)

At the same time, in Appendix VI issued with Decree 67/2023/ND-CP, the compensation level is specifically determined as follows:

+ Maximum compensation: 150 million VND/person in the case of the victim's death or brain damage causing sequelae of vegetative state.

+ Compensation according to the level of injury:

Compensation amount = Rate of injury x Level of insurance liability

Note: If the fault is entirely due to a third party, the insurance company will only compensate up to 50% of the prescribed level.

Table of regulations on payment of compensation for damage to health and life (Appendix VI):

Download

Property compensation level:

- The specific compensation level for damage to property in an accident is determined according to the actual damage and the degree of fault of the motor vehicle owner but does not exceed the insurance liability limit. In particular, the insurance liability for property caused by motor vehicles is 50 million VND/accident. (According to Clause 2, Article 6 of Decree 67/2023/ND-CP)

4. How much does motor vehicle insurance cost?

Compulsory motor vehicle insurance premiums (Compulsory insurance premiums for motor vehicle owners' civil liability) are specified in Appendix I of Decree 67/2023/ND-CP. Insurance fees depending on each vehicle are as follows (excluding 10% VAT):

- Motorcycles under 50cc, electric motor vehicles are 55,000 VND;

- Motorcycles over 50cc are 60,000 VND;

- Remaining motor vehicles: 290,000 VND.

Compulsory insurance premiums for motor vehicle owners' civil liability (Appendix I): Download

Note: The price of voluntary motor vehicle insurance does not have a fixed level but depends on the insurance contract between the person and the insurance company.

Is there a penalty for buying motor vehicle insurance online in Vietnam?

According to Article 10 of Decree 67/2023/ND-CP, the Certificate of Compulsory Civil Liability Insurance is presented in paper or electronic form. The electronic version of motor vehicle insurance is as valuable as the hard copy (paper copy) and can be presented when requested by the Traffic Police.

Thus, vehicle drivers can absolutely buy and use electronic motor vehicle insurance without being fined when asked by traffic police to present it because the legal value of the paper and electronic copies is the same.

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