The only method the humankind created for today to prevent them from any potential risks and damages or to alleviate and re-cover already-happened damages is the insurance.
We protect and get insured our lives, properties and all of other valuable stuff against all kinds of potential risk, including fire, flooding and other natural disasters, and also against all risks that might arise because of forethought and accidental actions of own and a third party, by paying certain amount of premium every year to get the insurance.
For instance, the government requires that you pay health insurance premium and automatically deducts such premium from your monthly salary no matter you wish to or not. But many people particularly who never get sick, leave this world without knowing and feeling a benefit of the premium they paid for their entire life. The government must spend certain part of the fee for preventive actions to keep the population disease-free. All risks except of health are managed and administered by private insurance firms. Usually such insurance firms implement the management of all remained risks that cannot be regulated by the government and that are not needed in government regulation. Though there are various types of insurance products, this time we will discuss about auto or vehicle-related insurance. No one will disagree that the rate of damage and loss caused by car accident and breaches almost reached to the level of damage caused by air pollution in Ulaanbaatar City.
In many countries, everyone is required by the law to have a third party damage insurance before sitting behind the wheel. If you drive without such insurance, you can be sure to appear before the court in these countries. That is how the government obeys to its main duty to protect its people, their life, safety and properties. In Mongolia, the government does insurance by halves like it does with other duties. The government cannot perform main duties, but it is taking away by force everything that can be efficiently done by private sector at lesser costs. In Mongolia, only those who recognize the importance of auto insurance get insured and the majority of population never cares about car accidents or do not trust in insurance.
The traffic police enter into machination with some insurance firms and presses car owners get insured by such firms. One side thinks that it provided auto insurance and the other side pretends that it is insured. Because of such wrong trend, citizens do not give importance to insurance because the amount of payment paid by the insurer for compensation of damage caused by a car accident cannot even cover the cost of painting the damaged car.
Few days ago, a car hit my car and damaged the right front side of it. I called the traffic police and the firm that insured my car. They did measurements and took photos after which we altogether went to a district’s traffic police to make a damage report. The report says that the driver who hit my car that drove straightforward on main road is guilty for the accident. But the guilty driver claimed that he was driving his friend’s car, that his car is not insured and that has no income because he is an unemployed. The insurance firm will have my car repaired, after which they will take a long road through court and prosecutors in order to get their repair costs from a real owner of the car.
The car owner will get the money paid to insurance company from his friend who drove his car. All the process to deal with this small accident lasted for whole four hours. And this is a normal incident that happens on Ulaanbaatar roads many times during a day. How many problems would be solved if all cars in Ulaanbaatar had related insurances? The insurance is first of all the system of accountability and responsibility. The car is the most dangerous weapon that can damage and destroy human life and property instantly if its driver is not responsible. Just for this reason, all civilized states require that this weapon and its operator are both insured compulsorily. In Australia, each car owner is insured against the damage of third party. Car owners must choose one of three certified insurance firms and must stick “green” card on the right top corner of the car’s front window.
Some states require this insurance in order to register and give a plate number. The rate of insurance premium is strictly controlled by the government. In Canada, car owners are required to have a particular type of insurance and choose some other types. The compulsory insurance types include auto insurance too. Germany passed a law on insurance of third party already in 1939 and insurance premium rate depends on the type of car, experience of driver and regional peculiarities. Before Germany, Britain passed the same law in 1930. Today, the law states that maximum amount of compensation payable for the health damage to a third party is one million pounds. In some states of the United States, car owners must get insured before applying for plate number. In most states, the date is put on the plate and every twelve months insurance term must be extended and the car must pass vehicle inspection to get number. For instance in Colorado State, vehicle inspections are carried at certified places on a daily basis.
Judging from all these examples, the insurance related to car accident serves to every person not depending on income level or social status. It is indeed true that car accident has nothing to do with driver’s income and position. Because the above countries managed to provide third party insurance for each driver ad car to protect lives and properties of their citizens, thanks to which they managed to reduce on-road risks and the number of accident per 1000 car has significantly decreased. It should be noted here that insurance firms together with city administration implements particular projects to improve traffic system and create more accident-free conditions, with the income from insurance. It is time to introduce and implement best practices tested and proved in other countries, in Mongolia with the purpose of reducing on-road risks.
Translated by P.Shinebayar
Ub Post
January 15, 2011