Today car owners in Russia are facing an unusual and ridiculous problem, massively. It often occurs that owners cannot get the insurance coverage for their cars due to the shortage of blank contract forms, as insurance companies' managers are letting them know. Such cases were completely unknown just three years back. Russian lawyers community is investigating this problematic situation which influences the development of Russian vehicle insurance segment.
Such shortages of blank forms are often occurring just in case the first is trying to obtain a minimum compulsory third-party liability insurance (or OSAGO ) contract. So exactly what could cause the so-called 'shortage' of blank forms for this sort of insurance contract? It appears that it isn‘t the fault of insurance companies' printers ; the rationale is that the greed of insurance companies that have developed a peculiar 'marketing scheme'. They‘re taking benefit of the issues of car owners that are obliged to get this insurance based on the law.
So, the shortage of blank kinds of OSAGO insurance contracts has been created in purpose. Insurance companies are taking this step in an effort to boost sales of other their products and services. Particularly, each time a customer involves an insurance company wishing to obtain an OSAGO contract, she or he will be proposed to sign a life, health or property insurance contract also. And just in case the customer refuses using this additional service, company's managers claim that there aren‘t any blank forms for OSAGO contracts. The customer cannot verify this statement in fact and also has either to agree getting this extra insurance service or just simply leave.
Basically, in this situation car owners can complain towards the Federal Anti-Monopoly Service of Russia, the Central Bank of Russia or towards the Russian Association of Motor Insurers. But practice has shown that such complaints don‘t help much : the only real result you will get is really a formal report given by a controller about an inspection which was a made in the corporate and about the shortage of law breaches during this company's actions. Consequently individuals are embracing insurance lawyers in Russia increasingly more often.
Still, it comes with an option. Actually, the service of vehicle insurance (including OSAGO contracts ) is really a public agreement based on the Article #426 from the Civil Code of Russian Federation and hence an insurance company doesn‘t possess a right to refuse this service to some customer. It doesn‘t possess a right to force somebody to get extra services just before getting an OSAGO contract also.
Just in case you have faced such an illegal refusal from corporate insurance manager, you‘ll need to jot down a formal request to sign an OSAGO contract in writing. You ought to attach copies of necessary documents inwith it, provide your phone number and register it inside the insurance company's branch office (ensuring It‘s sealed ). Most likely, in this case tomorrow they‘re going to call you and propose to come again on their office to sign the insurance contract without persuading one to accept any extra conditions.
Now allow us to investigate the situation with Russian insurance companies refusing to sign third party liability (usually shortened as KASKO ) contracts.
Russian insurance companies are having certain problems during this sphere themselves. Central offices are cancelling KASKO services in regional branch offices due to drastic development of customer fraud which economic security services of branch offices are failing to mitigate.
The rationale is the amount of insurance fraud 'business' schemes which include acquiring an insurance contract for the expensive car after which doing purposeful harm to it (for example cutting the upholstery, making scratches or fissures upon the glass ) has grown more than once during the final 2 yrs. Thus, a car owner can get the compensation coming from the insurer and that is calculated based upon official car dealers' prices for repair parts. Simultaneously, the damaged car could be actually repaired with a usual low-cost repair shop.
Flaws in Russian insurance legislation lead to such fraud schemes being very profitable for people who choose this type of 'business'. Consistent with information received by Russian lawyers throughout their professional activities, such schemes are now increasingly utilized by people that were not associated with fraud schemes earlier.
Economic security departments of insurance companies cannot effectively counter such fraud attempts because they don‘t have any legal means to perform deep investigations. All they could do usually is to recommend refusing such claims. But often it helps make the situation even worse for the insurer each time a car owner whose claim was refused wins this case inside a court and receives a sum even bigger than was claimed initially.
The emerging wave of that fabricated insurance claims in Russia has urged many insurance companies to prevent supplying the service of KASKO insurance as well as to quit the Russian insurance market in the least. The main section of Russian-based insurance companies once had the vehicle insurance services as their primary supply of income and Didn‘t completely realize just how many risks exist during this niche ; so now these businesses are owning a hard time.
So here is an advice for car owners willing to get a vehicle insurance contract in Russia from Russian insurance lawyers. It is better to be very careful when choosing an insurance provider: in case of this company's bankruptcy you would not be able to claim your payment via the Russian Association of Motor Insurers as this organization can only help to compensate losses by OSAGO contracts. Therefore, you would have register as a creditor in the formal bankruptcy procedure, and the more creditors there would be, the smaller chances of getting some compensation you would have.
The author is writing overviews of latest legal news and legal trends in Russia based upon research data and inside information received from a Russian lawyer company which offers a wide range of legal services in Russia
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