Only one in ten Romanian car owners has voluntary motor insurance

Only one in ten automobiles in Romania is covered by voluntary motor insurance (CASCO) – and very few of the others could afford to pay for the repair of their own cars after an accident caused by themselves, the Romanian insurers’ association UNSAR warned, as reported by Profit.ro. However, data suggest that the cars eligible for a CASCO insurance (those newer than 10 years), not covered by CASCO, are never or very rarely involved in incidents – an interesting finding that implies that Romanian drivers are aware of their level of risk.

Out of an estimated total number of 560,000 incidents per year in Romania (5.6% rate of use for mandatory motor insurance contracts, RCA times 10 million automobiles), 275,000 (754/day according to UNSAR) were subject to CASCO compensations.

Out of 10 million automobiles in Romania, 8 are older than 10 years, thus not eligible for CASCO. Statistically, it is therefore highly likely that the 285,000 accidents with no CASCO compensations involved such non-eligible cars.

In conclusion, the UNSAR and official data combined suggest that very few, if any, of the CASCO-eligible cars (newer than 10 years) without CASCO were involved in accidents. They are those who UNSAR encourages signing a CASCO contract and thus share their risk (hence money) with the high-risk drivers (who sign CASCO contracts and use them once every four years).

The data published by UNSAR suggest that the car owners with a CASCO insurance are using it more frequently – either because the insurance itself encourages less cautious driving, or because the risk-taking drivers are precisely those who, aware of their driving style, cover the risk with insurance.

More than 25% of the cars with a CASCO insurance are involved in incidents – according to UNSAR (754 accidents per day for a total number of contracts of 10% of the 10 million of automobiles registered in Romania being covered by CASCO results in 27.5%) – which is five times more compared to the much lower average (5.6%) of incidents reported by holders of mandatory (third party liability) RCA insurance.

Another important factor for the low rate of CASCO insurance in Romania is the age of the automobiles – cars older than 10 years can not be covered by CASCO. Only two in ten Romanian automobiles have an age below 10 years – which makes them eligible for CASCO insurance. The effective CASCO insurance ratio is thus rather 50% (of the market) than 10%.

Also, the sales of (imported) used cars are twice as large as the sales of new cars in Romania. For some unknown reasons, the insurers are very cautious when it comes to such cars, and the premiums required are typically higher.