OSAGO + casco: regulator's proposals

The Bank of Russia has devised a draft ordinance on the minimum requirements for the terms and procedure of voluntary auto insurance. The document allows drivers not to get a separate casco insurance policy, but to input the information about it in their OSAGO (compulsory motor third-party liability insurance) policies.

The draft implies that in this case an auto casco policy should cover risks of loss or damage of a vehicle and that such policy can also comprise a franchise not exceeding 20% of the insurance amount.

In this case, the auto casco policy should have the same insurance period as the OSAGO policy and should cease to be effective upon termination of the latter.

The amendments proposed will make it more convenient for both consumers and insurers to formalize auto casco policies.

The draft has been prepared after consultations with Russia’s Ministry of Finance in pursuance of the instruction given by Russian Prime Minister Dmitry Medvedev to review the possibility of combining auto casco and OSAGO policies in one insurance product.