The implementation of mandatory insurance against third parties, In Guatemala, which caused demonstrations and rejection that forced the government to repeal it, generated questions among Guatemalan drivers.
Was it different from current insurance? What covered? How much should it be paid? These and other doubts are common among those who still do not know the details of the policies.
Given these uncertainties, it seeks to clarify the questions with clear information about the cost of insurance, the types of coverage and their conditions.
If you still have questions about how this type of insurance works, know the answers they provided two runners who expanded information on the subject.
Difference with traditional insurance
Kevin Mijangos, representative of WC insurance runnersexplained that the proposed policy – which was mandatory, but was already repealed – consisted of a Basic plan that exclusively covered the civil liability against third parties.
This plan is designed to cover the damage that the insured causes other people or properties. Does not include coverage for own damage or vehicle occupantswhich is characteristic of more complete plans.
He Basic planwhich was intended to establish as mandatory in Guatemala, had to comply with a specific insured sum, in order to guarantee the coverage of damage to third parties, due to injury, disability or death, in case of traffic accident.
Insurers currently offer similar plans, as explained also Pented ByronPresident of the Association of Insurance and Finance Corridors (Chords).
Both pointed out that the key to understanding the difference between having coverage for third parties and complying with the legal requirement – today without effect – is the following:
- Intermediate insurance and Premium They include civil liability against third parties, with a specific sum to cover the damages that the insured causes other people, either due to injuries, death or material damage. This sum represents the limit that the insurer will pay by accident, and each insurer defines said amount. For example, Many policies offer Q100 thousand to cover damage to third parties.
- In the case of private vehicles, the mandatory insurance proposed by the Government required coverage equivalent to 200 monthly minimum wagesthat is to say, Q760 thousand 120. Current policies offer Q100 thousand, therefore, They would not comply with such legal requirement, even if they include coverage against third parties.
- Due to this difference, the insurance market announced the creation of options that will be adjusted to the regulations. This adaptation could continue, since the government set a year to discuss the measure again.
The difference is that the limit of 200 minimum wages is the maximum amount that the insurer will pay in case of a serious accident, while the cost of the monthly or annual policy is the price paid by the insured to have that coverage.
Insurance work with a risk distribution system:
- Many insured pay raw (monthly or annual).
- Only some will have accidents and need to use insurance.
- The insurer uses everyone’s payments to cover the accidents according to the terms of the policy.
Therefore, although the maximum coverage is high (200 minimum wages), the cost of the policy is lower, since not all insured will make claims at the same time.
What types of insurance exist?
Mijangos explained that, in general, there are three types of coverage, although insurers can call them differently:
- Coverage all risk (full cover or Premium):
- Section 1: It covers its own, total or partial damage, of the insured vehicle.
- Section 2: Civil liability, which covers the damage to third parties according to the hired plan.
- Section 3: Cover damage to the occupants, with a specific sum per person.
- Complementary coverage: They can include road assistance, home assistance, pet assistance, legal assistance and release bail.
- Intermediate coverage (appointed risks): Similar to complete coverage, but with up to 21 exclusions, such as accidents for driving under the effect of alcohol or without license. It is less complete, but smaller cost.
- Basic coverage (civil liability against third parties): It covers only the damages that the insured causes to third parties, but with coverage less than what the regulations required. Insurers cover vehicles up to 30 years old under this plan.
How much does it cost to third parties in Guatemala?
The runners explained that insurance offers a maximum sum to cover the damages caused to third parties, including injuries, death or material damage. This amount is the top that the insurer will assume by incident.
According to Mijangos, the current basic insurance with coverage of up to Q100 thousand In civil liability, it has an average cost of Q728 a yearequivalent to Q60 per month.
If the mandatory insurance proposal promoted by the Government – with the coverage of Q760 thousand 120– The cost for private vehicles could rise to approximately Q100 per monthalthough this would depend on the final decisions of insurers.
Penado detailed the approximate costs of current civil liability insurance, are:
- Motorcycles: between Q800 and Q1 thousand annually (Q67 – Q83 per month).
- Private cars: between Q1 thousand 200 and Q2 thousand annually (Q100 – Q167 per month).
- Heavy vehicles: between Q2 thousand 500 and Q4 thousand annually (Q208 – Q333 per month).
These amounts would have readjustments, but it will depend on the insurers that increase the maximum amount to be covered by damage to third parties, or increase the total cost of the annual policy.
Payment modalities for traditional insurance:
- Unique payment or fractional payment by up to 10 installments.
- Credit card payment options.
- Insurers allow fractional payments, usually in up to 11 installments.
Mandatory Insurance (repealed)
- Estimated cost: It is expected to be lower than traditional insurance, because it only covers damage to third parties due to injuries or death, not including material damage.
- Limited risk: Due to your focus on just covering damage related to injuries or death.
Additional coverage
- The insured with traditional insurance could have to acquire additional coverage to comply with the new mandatory regulations.
In other countries with mandatory insurance – as Costa Rica, Mexico and Colombia – rates are usually standard in all insurers.
In Guatemala, resolutions of the Superintendence of Banks (SIB) and possible future agreements between insurers to define costs and competition schemes will have to wait.
Also read: Insurance prices for motorcycles in Guatemala: coverage and factors to take into account