OSAGO policies will double in price in 2027 due to expansion of payment limits

The Cabinet of Ministers supported Anatoly Aksakov’s bill to increase the maximum payment under compulsory motor liability insurance for damage to property and harm to life and health to 2 million rubles. The government directly indicated that the innovation will lead to an increase in insurance premiums by an average of 8%, and the delay is needed to redistribute budget funds. Human rights activists are sounding the alarm – we are talking about a doubling in price of insurance policies for all Russians.

As follows from the government’s response to Aksakov’s bill, the only addition made to the initiative was the postponement of the proposed date of entry into force of the new norm to March 1, 2027.

“The Government of the Russian Federation supports the bill taking into account this comment,” the document notes.

The legislative initiative was developed by the Chairman of the State Duma Committee on the Financial Market, Anatoly Aksakov. Currently, the maximum payment under compulsory motor liability insurance for damage to property is 400 thousand rubles, for damage to life and health – 500 thousand rubles. The bill proposes to raise the limit to 2 million rubles, thus equalizing payments under compulsory motor liability insurance and under the OSGOP policy (compulsory insurance of the carrier’s civil liability for causing harm to the life, health, and property of passengers).

Earlier, the President of the All-Russian Union of Insurers, Evgeny Ufimtsev, drew attention to this difference using the example of taxi cars. In the event of an accident while transporting a passenger, insurance coverage is 2 million rubles. If the incident happens with the same car, but outside of the taxi order, the payment will be 500 thousand rubles.

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“The concept of the bill, aimed at increasing insurance protection for victims under compulsory motor liability insurance, is supported,” the Cabinet of Ministers said in its response.

However, the government noted, the adjustments will entail an increase in the insurance premium for compulsory motor liability insurance by an average of 8%. This will include increased costs for government agencies and state-owned enterprises. “Consequently, a redistribution of funds for these costs in budgets will be required,” the Cabinet explained.

For this reason, the government concluded, it makes sense to set the date for the innovations to come into force on March 1, 2027: this will allow the necessary parameters to be laid down when forming budgets.

The real picture: understatements and shortages of payments already now

De jure, increasing the limits looks like strengthening the protection of car owners. De facto, even the current 400 thousand rubles for repairs and 500 thousand rubles for damage to health are regularly underestimated by insurers. The market cost of restoring a car after a serious accident has long exceeded these amounts, and companies use their own calculation methods with inflated wear and tear and outdated price guides for spare parts.

In practice, victims receive payments that are barely enough for partial repairs, after which they are forced to either pay extra out of their own pockets or sue insurers. Raising the formal limit to 2 million rubles without simultaneously tightening control over the actual amount of compensation will only create the illusion of greater security without solving the systemic problem of underpayments.

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Two ends

Automobile lawyer of the Freedom of Choice movement Sergei Radko believes that increasing payments is the right idea, but you need to be realistic and understand that insurers are counting on their benefit in this case.

“If now the maximum health benefits are 500 thousand rubles, but they will be 4 times higher, then you can imagine how much the price of the insurance policy will need to be increased. I think that the price of an MTPL policy will at least double in price,” Radko told Motor magazine.

At the same time, the interlocutor believes that a differentiated approach to choosing policies of different prices in OSAGO is not needed.

“Because when the driver chooses, it is clear that everyone will take the cheapest option. That is, people will not think about possible compensation for harm to the victim, but only about their own pockets. On the one hand, this is understandable, on the other hand, it does not in any way meet the interests of consumers, because everyone will buy cheaper policies,” the lawyer noted.

Before increasing the cost of compulsory motor liability insurance, you need to check what kind of profit this type of insurance generates for insurers who claim that it is unprofitable, but cling to licenses under the “automobile civil liability” policy, notes automobile lawyer Sergei Smirnov. He agrees that it is necessary to increase payment limits, but the current compensation would be enough for Russians if insurance companies did not try with all their might to evade payments.

“All the problems occur due to the fact that insurance companies, when issuing referrals for repairs or paying in cash according to a unified methodology, underestimate payments as much as possible,” Smirnov said in a conversation with the magazine.

He notes that even the position of the Supreme Court has repeatedly confirmed that the injured policyholder usually recovers through the court from insurers not the amount of insurance compensation, but losses associated with improper performance of their duties.

“If they carried out everything normally, then there would not be large financial burdens. And I would also pay attention to our neighbors from Belarus, because they have a much higher payment limit, while the cost of the policy is lower. Somehow they work, but for some reason ours can’t,” Smirnov noted.

The next amendment to the OSAGO law was initiated by the Chairman of the Duma Committee on the Financial Market, Anatoly Aksakov. Previously, market participants and experts have repeatedly noted that key initiatives in the field of compulsory motor liability insurance in recent years are actually being prepared with the active participation of the insurance lobby.

Increasing limits inevitably leads to an increase in insurance premiums – a direct consequence of which the government has already confirmed with a figure of 8%. At the same time, the issue of putting things in order in the existing payment system (fighting understatements, independent examination, adequate wear and tear) is not raised in the bill.

Thus, car owners will receive a formally increased limit, but insurers will have a legal reason to raise rates, while maintaining the ability to lower real payments.