Advance indemnity of compulsory civil liability insurance by motor vehicle owners in Vietnam

Advance indemnity of compulsory civil liability insurance by motor vehicle owners in Vietnam (Internet image)

Regarding this issue, LawNet would like to answer as follows:

1. Advance indemnity of compulsory civil liability insurance by motor vehicle owners in Vietnam

According to Clause 3, Article 12, Decree 67/2023/ND-CP, the insurer must provide advance indemnity for damage to health and life, to be specific:

- In case the accident has been identified to be covered by insurance:

+ 70% of estimated indemnity per person in case of fatalities.

+ 50% of estimated indemnity per person in case of bodily injuries.

- In case the accident has not been identified to be covered by insurance:

+ 30% of the maximum coverage per person in case of fatalities and estimated whole person impairment (WPI) of 81% or more.

+ 10% of the maximum coverage per person in case of estimated WPI of from 31% to less than 81%.

After providing advance indemnity, insurers may request MVIF to reimburse the advance payment if the accident is an insurance exclusion or not covered by insurance.

2. Indemnities of compulsory civil liability insurance by motor vehicle owners in Vietnam

- Indemnities include:

= Specific indemnities for loss of health and life are determined according to corresponding types of injury or damage under Schedule for health and life indemnities under Annex I attached to Decree 67/2023/ND-CP or according to agreements (if any) between the insured and victims or victims’ heirs (in case the victims are dead) or victims’ representatives (in case the victims are incapacitated according to judicial decisions or underage as prescribed in the Civil Code) but must not exceed the corresponding indemnities specified under Annex VI attached to Decree 67/2023/ND-CP.

In case judicial decisions are made, judicial decisions shall prevail as long as the corresponding indemnities specified under Annex VI attached to Decree 67/2023/ND-CP are not exceeded.

In case the damage to health and life is caused by multiple motor vehicles, indemnities shall be determined by degrees of fault of motor vehicle owners as long as the total indemnity does not not exceed the maximum coverage.

For accidents which are entirely caused by third party as determined by competent authorities, indemnities for health and life insurance coverage rates for the third party shall equal 50% of the indemnities specified under Annex VI attached to Decree 67/2023/ND-CP or agreements (if any) between the insured or victims’ heirs (in case victims are dead) or victims’ representatives (in case victims are incapacitated according to judicial decisions or underage) but must not exceed 50% of the indemnities specified under Annex VI enclosed with Decree 67/2023/ND-CP.

= Specific indemnity for an accident is determined based on actual damage and degree of fault of motor vehicle owner but must not exceed the maximum coverage.

- Insurers may reduce up to 5% of indemnities for damage to property in case policyholders or the insured fail to notify insurers about accidents according to Clause 4 of Article 12 of Decree 67/2023/ND-CP or insurers detect that policyholders and the insured fail to notify in case of changes to factors which serve as the basis for calculating insurance premiums during execution of policies, thereby increasing insured risks after insured events occurred.

- Insurers are not obliged to pay for excesses of the maximum coverage according to regulations in Decree 67/2023/ND-CP, except for cases in which motor vehicle owners participate in voluntary insurance policies.

- In case multiple compulsory civil liability insurance policies are concluded for a single motor vehicle, indemnity shall be determined only according to the first concluded policy. Insurers must refund 100% of paid insurance premiums for the remaining insurance policies.

(Clause 6, 7, 8, 9 Article 12 of Decree 67/2023/ND-CP)

Nguyen Ngoc Que Anh

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