Exclusion of compulsory civil liability insurance of motor vehicle users in Vietnam

Exclusion of compulsory civil liability insurance of motor vehicle users in Vietnam (Internet image)

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

1. Exclusion of compulsory civil liability insurance of motor vehicle users in Vietnam

Insurance enterprises shall not compensate for following cases:

- Damage done intentionally by motor vehicle users, motor vehicle operators or victims of the accidents.

- Vehicle operators intentionally fleeing the scene after committing accidents without exercising civil responsibilities of motor vehicle users. Vehicle operators intentionally fleeing the scene after committing accidents and exercising civil responsibilities of motor vehicle users shall not be included under insurance exclusion.

- Operators who are not within adequate age range to operate motor vehicles as per road traffic laws; operators who do not carry legitimate, proper driving license (driving license with template number at the back inconsistent with the latest template number in information system for managing driving license) issued by competent authorities at the time of accidents or carry inappropriate driving license when operating motor vehicles which require specific driving license. 

In case driving license of operators are revoked or suspended, the operators are considered to be not carrying driving license.

- Damage that causes indirect consequences including: reduced commercial value, damage related to use and utilization of damaged assets.

- Damage to assets caused by operators who have alcohol in breath or blood, or use narcotics or other prohibited stimulants as per the law.

- Damage to assets which are lost or stolen as a result of the accidents.

- Damage to special assets including: gold, silver, precious stones, financial instruments namely money, antiques, precious fine arts, and cadavers.

- War, acts of terrorism, earthquake.

(Article 13 of Decree 03/2021/ND-CP)

2. Claims of compulsory civil liability insurance of motor vehicle users in Vietnam

* 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 16 years of age).

* 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:

- 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.

- 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.

* Insurance claims:

- 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 attached to Decree 03/2021/ND-CP 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 attached to Decree 03/2021/ND-CP.

In case judicial decisions are made, judicial decisions shall prevail as long as the amount specified under Annex I attached to Decree 03/2021/ND-CP 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 Decree 03/2021/ND-CP 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 16 years of age) but must not exceed 50% of the amount specified under Annex I attached to Decree 03/2021/ND-CP.

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

* Insurance enterprises are not obliged to pay for the excess insurance liabilities according to Ministry of Finance except for cases in which motor vehicle users participate in voluntary insurance contracts.

* In case multiple compulsory civil liability insurance contracts are concluded for a single motor vehicle, compensation shall be determined only according to the first concluded contract.  Insurance enterprises must refund 100% of paid insurance premiums for the remaining insurance contracts.

(Article 14 of Decree 03/2021/ND-CP)

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