Change the compensation claims of compulsory insurance for motor vehicles from March 1, 2021 in Vietnam

According to Article 14 of the Decree No. 03/2021/NĐ-CP of the Vietnam Government, if accidents within insurance liabilities occur, insurance enterprises must reimburse insurance beneficiaries for the payment that has been made or will be made to the accident victims by the insurance beneficiaries. In case insurance beneficiaries decease or lack legal capacity according to judicial decisions, insurance enterprises shall directly compensate the accident victims, victims’ heirs (in case the victims have deceased) or victims’ representatives (in case the victims lack legal capacity according to judicial decisions or are under 6 years of age).

Thus, within 3 working days after being notified by insurance buyers or insurance beneficiaries about accidents, insurance enterprises must pay advance compensation for damage to health and lives, to be specific:

(1) In case accidents have been identified to be within scope of compensation:

- 70% of insurance claims as per the law/person/case in case of fatalities.

- 50% of insurance claims as per the law/person/case in case of bodily injuries receiving emergency medical treatment.

(2) In case accidents have not been identified to be within scope of compensation:

- 30% of insurance liabilities as per the law/person/case in case of fatalities.

- 10% of insurance liabilities as per the law/person/case in case of bodily injuries receiving emergency medical treatment.

Concurrently, insurance claims of the insurance enterprises when an accident occurs:

Specific compensation for health and lives is determined for each type of injury and casualty under Schedule for health and life compensation under Annex I or according to agreement (if any) between insurance beneficiaries and victims or victims’ heirs (in case the victims have deceased) or victims’ representatives (in case the victims lack legal capacity according to judicial decisions or are under 16 years of age) but must not exceed the amount specified under Annex I. (Note: In case judicial decisions are made, judicial decisions shall prevail as long as the amount specified under Annex I is not exceeded).

- In case multiple motor vehicles constitute to health or life damage, compensation amount shall be determined by levels of fault of insurance beneficiaries as long as total compensation amount must not exceed insurance liabilities.

- In case of accidents which are entirely caused by third party as determined by competent authorities, health and life insurance for the third party shall equal 50% of the amount specified under Annex I attached to this Decree or agreement (if any) between insurance beneficiaries or victims’ heirs (in case victims have deceased) or victims’ representatives (in case victims lack legal capacity according to judicial decisions or are under 6 years of age) but must not exceed 50% of the amount specified under Annex I.

- Specific asset compensation/accident is determined based on practical damage and levels of fault of insurance beneficiaries but must not exceed insurance liabilities.

In comparison to the previous regulations, according to Article 9 of the Decree No. 103/2008/NĐ-CP guided by Article 9 of the Circular No. 22/2016/TT-BTC, insurance liability level means the maximum sum of money which an insurance enterprise may be obliged to pay for the loss of life or a bodily or property damage caused by a motor vehicle to a third party or passenger in an insured accident. Specifically as following:

- A death as a result of motor vehicle accidents shall be indemnified at the rate of 100 million dong per person per occurrence.

- Property damage by two-wheelers, tricycle, motorbikes and the like (including vehicles for the disabled) shall be indemnified at the rate of 50 million dong per occurrence.

- Property damage by cars, tractor, construction vehicles, and vehicles for agricultural or forestry uses and other types of military vehicles for the use of national security and defense (including trailers and semi-trailers pulled by motor cars or tractors) shall be indemnified at the rate of 100 million dong per occurrence.

It can be seen that the insurance company's compensation level when an accident occurs has changed a lot compared to previous provisions. Therefore, from March 1, 2021, instead of paying insurance with a specific amount (VND 100 million/person/1 accident or VND 50 million/1 accident), insurance claims are determined determined for each type of injury and casualty under Schedule for health and life compensation under Annex I or according to agreement (if any) between insurance beneficiaries and victims or practical damage and levels of fault of insurance beneficiaries but must not exceed insurance liabilities.

Ty Na

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE