GEORGIA: one-time subsidization is needed to support forthcoming compulsory motor insurance

9 May 2019 — Marina MAGNAVAL
According to the President of the Georgian Insurance Association, Devi KHECHINASHVILI, one-time subsidization of compulsory vehicle insurance is a good initiative to increase civil responsibility, the Georgian Media holding Commersant wrote.

The initiative proposes benefits for vehicle owners in the form of a voucher from the insurance company for 90% of the amount paid, which can be used to purchase automobile fuel. KHECHINASHVILI believes that at the first step a stimulus is needed to support the segment's development.

"A one-time subsidy should be used as an incentive. In Georgia, people always dislike obligatory costs and oppose them, and given this, the government should promote the launch of the system. It is obvious that it should be a one-time action, when drivers get used to the new reality and understand how important it is to be insured, the norm will no longer be needed," President of the Insurance Association explained.

Even though the average cost of an insurance policy will be rather small, as the bill authors suggest, it will be difficult for drivers to pay, due to the lack of motor insurance culture in the country. As of now, the bill does not provide for any subsidies or transitional period. Motor insurance will become mandatory for all vehicles in Georgia from July 1, 2019.

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