The Prague Post
October 12th, 2008
Endowment Fund     Business Listings ONLINE      Reservations      Classifieds    Subscriptions
Prague accommodation
Prague Real Estate

Home » Archives » Banking & Finance

Driven database

Insurers to keep better eye on drivers

By Victor Velek
Staff Writer, The Prague Post
October 10th, 2007 issue

Accident-prone drivers will no longer be able to avoid higher insurance premiums now that a new central database launched by the Czech Insurers Bureau (ČKP) allows insurers to see their clients’ driving histories.
“Today, to avoid higher payments, some drivers change insurers and pretend they had no accidents while signing a new insurance contract,” said Jakub Hradec, head of the industry group.
With the new database, cheating is no longer possible. Third-party liability insurance, which is mandatory for every motor vehicle owner, is now centrally stored and shared. It contains almost all data on car accident damages since 2000, when the country’s vehicle liability insurance law came into force.
“The database’s purpose is to ensure the just application of the system of insurance bonuses and extra charges as it is provisioned in the law,” Hradec said.
Motor vehicle liability insurance for the most common passenger cars in the country, such as the Škoda Fabia, ranges between 5,000 and 6,000 Kč a year. Most insurers offer a 5 percent discount for every year a driver goes without an accident.
Drivers with no accidents for seven years can save more than one-third on insurance premiums — some 2,000 Kč a year. Insurers charge drivers with accidents more money on top of the basic rate.
Besides eliminating further abuses, insurers believe the database will reduce paperwork and might even convince drivers to be more careful.
“We see it as a contribution to road safety,” said Václav Bálek, spokesman for the largest auto liability insurance provider, Česká pojišťovna (ČP). “It’s fair. Only people who drive responsibly will pay less.”
“In the ideal case, [the database] could also work as a motivation for more responsible driving,” said Marek Vích, a spokesman for Kooperativa insurance company. For reckless drivers who cause multiple accidents, the evasion of extra insurance charges has been an attractive and easy-to-achieve option, he added.
Giving insurers direct communication with each other should also make the liability insurance industry less bureaucratic.
“It will establish a friendlier environment for clients, as they will no longer need to get an insurance history statement when changing their insurer,” Hradec said.
Not everyone is so positive about the new database, however. For example, its data might not be 100 percent reliable, said Patrik Bala, a spokesman at Wüstenrot insurance company.
Records from the early part of the decade are often incomplete and must be used with caution, Bala said.
“It will bear real fruit in the future, in several years’ time,” he added.
Currently, the majority of about 5.8 million Czechs with contracts for auto liability insurance pay discounted rates on their vehicles, according to insurance company statistics. Kooperativa and Wüstenrot estimate that several percent of these drivers also enjoy unwarranted insurance discounts.
“The number is not negligible, but it is not high either,” said Bala.
However, it may be hard to punish drivers who concealed their accidents in the past.  Competition on the insurance market is so stiff, and at least three of the 11 companies in the industry say they might not strip cheating drivers of their insurance bonuses.
“We will focus on scanning new clients rather than on using the database as a tool to punish old abuses,” Bala said.
ČP and Kooperativa have also said they are reluctant to target clients who conceal past accidents.

Victor Velek can be reached at vvelek@praguepost.com


Other articles in Banking & Finance (10/10/2007):

Browse the Current Issue

If you enjoyed this article, why don't you subscribe to the print version!
We accept secure online transactions provided by PayPal and Moneybookers

Be the first to add a comment!


Full Name: *
City: *
E-mail: **
This comment can be published in the print version of The Prague Post
Enter the text on the right:
 visual captcha
Comment: *
* Required field. In order to be approved for display, comments must have a first and last name and a city.
** E-mails are required and will only be used for internal purposes.

Most visited in Business Listings

Hotel booking
The Prague Post Online contains a selection of articles that have been printed in
The Prague Post, a weekly newspaper published in the Czech Republic.
To subscribe to the print paper, click here.
Unauthorized reproduction is strictly prohibited.