YEREVAN, March 16, /ARKA/. About 83% of automobile owners in Armenia have bought mandatory car insurances, Vahan Avetisian, head of the Car Insurers Bureau, told a news conference today.

The mandatory insurance against physical damage caused to other cars and individuals became mandatory in the country on January 1, in accordance with a government-drafted law passed by the Armenian parliament last year. Of some 430,000 or so vehicles registered in Armenia , more than 3% have been granted a temporary exemption from the requirement allowed by the law. They will have to deposit their license plates with the road police and will be allowed to drive their cars for up to three months a year.

Vahan Avetisian said the 83% figure was very promising as it was achieved in just two and a half months. He described it as indication that Armenian motorists are law abiding citizens.

He said also automobile insurance fraud cases reported after the introduction of mandatory insurance will not grow. He said virtually all related issues are addressed by the law and allegations that the mandatory insurance may result in increased number of fraud are not grounded. He also said that the rate of fraud in other countries varies from 5% to 30%. He said all reported fraud cases are petty ones when the involved sides in an accident seek to inflate the size of damages in a hope to get a bigger compensation.

He said to fight car insurance fraud the so-called bonus-malus system will be introduced in 2013 that is a system that adjusts the premium paid by a customer according to his individual claim history. Bonus usually is a discount in the premium which is given on the renewal of the policy if no claim is made in the previous year. Malus is an increase in the premium if there is a claim in the previous year. Bonus-malus systems are very common in vehicle insurance. Vahan Avetisian denied speculations that car insurance premium may increase. -0-