Increase the compulsory civil liability insurance duration of motor vehicle users in Vietnam from March 01, 2021

The duration of the compulsory civil liability insurance of motor vehicle users are prescribed at Article 9 of the Decree No. 03/2021/NĐ-CP of the Vietnam Government as follows:

(1) For motorcycles, motorized tricycles, mopeds (including electric motorbikes) and similar vehicles according to the Law on Road Traffic of Vietnam, the minimum insurance duration is 1 year and the maximum insurance duration is 3 years;

(2) For remaining motor vehicles, the minimum insurance duration is 1 year and the maximum insurance duration shall conform to a valid period of periodic technical safety and environmental protection inspection which has more than 1 year of valid period;

(3) For following cases, insurance duration shall be less than 1 year: Foreign motor vehicles which temporarily import for re-export participate in traffic within Socialist Republic of Vietnam territory for less than 1 year; service life of motor vehicles is less than 1 year as per the law; temporarily registered motor vehicles according to regulations of Ministry of Public Security of Vietnam;

(4) In case motor vehicle users who have multiple vehicles participating in insurance at different times in a year wish to unify insurance participation time in the following year, insurance duration of these vehicles may be less than 1 year and equal to the remaining valid period of the first contract concluded in that year. Insurance duration of the following year for insurance contracts and certificates of insurance which have been unified in terms of participation time shall conform to the above (1) and (2).

In comparison with previous provisions, according to Article 10 of the Decree No. 103/2008/NĐ-CP (guided by Article 7 of the Circular No. 22/2016/TT-BTC), the duration of a certificate of insurance is limited to 01 year. However, it shall be less than 01 year in the following cases:

- Foreign motor vehicles temporarily imported in Vietnam for under 01 year before being re-exported.

- Every foreign motor vehicle whose shelf life is under 01 year.

- Motor vehicles eligible for temporary registration including:

+ New cars that are imported or assembled or distributed from warehouses, ports, factories or from an auto agent to others and warehouses;

+ Cars that are undergoing deregistration procedures for re-export;

+ Cars that are permitted to be transited (except for those prescribed in the State agreement);

+ Car chassis with a cabin; or flatbed truck

+ Cars used for driving tests;

+ Vehicles with number plates of trade-economic zones prescribed in the Government’s regulations operating within the territory of Vietnam;

+ Vehicles assembled in Vietnam undergoing road trials;

+ Vehicles used for conferences or sport events upon requests of the Government or Ministry of Public Security of Vietnam;

+ Other types of motor vehicles permitted to be temporarily registered under provisions of laws.

- If any motor vehicle owner buying multiple compulsory insurances for his/ her motor vehicles at various times wishes to get their effective periods synchronized, the valid period of the compulsory insurance of such motor vehicles may be under 01 year or equal to the remaining effective period of the first compulsory insurance contract of the same year. The effective period of the compulsory insurance for all compulsory insurance contracts (that has been synchronized) shall be 01 year.

Thus, from March 01, 2021, when the Decree No. 03/2021/NĐ-CP of the Vietnam Government officially takes effect, the duration of the compulsory civil liability insurance of motor vehicle users will be increased to 03 years (except for some special cases, the insurance period is limited to 1 year or less than 1 year).

In addition, during the valid period stated on the Certificate of Insurance, if there is a transfer of motor vehicle ownership, all insurance benefits related to the civil liability of the old motor vehicle owner will still be valid for new motor vehicle owners.

Le Thanh

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