THE Insurance Council of Zimbabwe (ICZ) has announced an upward review of statutory motor vehicle insurance premiums, which it sid are in response to inflation and exchange rates movement.
In a circular yesterday, ICZ said with effect from January 25, 2022, the annual Road Traffic Act (RTA) cover premium for private cars would be $9 810 and the quarterly premium would be $3 270, up from the July 2021 rates of $7 695 and $2 565, respectively.
The statutory motor third party policy premiums and compensation limits denominated in United States dollars are regulated through Statutory Instrument 293 of 2020 of the Road Traffic Act.
The limits are converted to the local currency and are periodically reviewed in line with inflation and exchange rates.
Policyholders have an option to pay premiums in local or foreign currency.
“The reviews are necessary to ensure adequate compensation of third parties in the event of a claim. The current review resulted in an increase in compensation limits from $171 000 for RTA and $855 000 for full third party in July 2021 to $218 000 and $1 090 000, respectively, effective January 2022,” the ICZ statement read.
“The stated limits relate to property damage, bodily harm and death. The statutory policy also provides compensation for medical and funeral expenses.
“The adjustment was justified as a necessity to hedge insurers against sub-economic premium rates that will result in operational losses as well as the inability to compensate victims adequately and timeously.”
While most motorists have the statutory motor insurance cover, ICZ encouraged the use of the comprehensive insurance policy which provides cover for both the policyholder and third parties at higher compensation limits.
The statutory motor policy provides benefit for third parties only.