Armenian Drivers Need Auto Insurance

Yesterday I bought mandatory auto insurance for my car, having found out only a month ago that I needed to invest in a policy.

Beginning January 1 all registered motor vehicles in Armenia must have insurance according to a law that was passed last May, otherwise a motorist will be fined 50,000 dram every time he/she is pulled over. That means you could be potentially fined multiple times driving home from work, for instance. And since there is substantial amount of money to be made from violations of this law, I am sure the traffic police will be out in full force. Something tells me whoever’s at the top benefitting from the income this new law brings and its actual enforcement is one and the same person.

According to an article that appeared on the RFE/RL web site on November 25 only one in ten drivers in Armenia have insurance up to date. I don’t think those statistics have changed much since that article was published. Here’s an excerpt:

Vache Gabrielian, the deputy governor of the Central Bank of Armenia (CBA), warned them to hurry up, saying that the authorities will not extend the January 1 legal deadline for the introduction of what has until now been a rare practice.


Gabrielian revealed that despite the approaching deadline only roughly 40,000 drivers have bought such policies to date. “There is an old Russian saying, ‘Until the thunder strikes, the peasant won’t cross himself,’” he said. “The same logic explains the wait-and-see approach of our citizens.”

A friend of mine put me in touch with an insurance agent — there are about nine companies providing auto insurance at the moment. The agency he represents, Roskosstrakh, is actually a Russian company that started doing business in Armenia a year or two ago. We called him in the morning and since there is no mad rush to get insurance at the moment, the policy was signed by mid afternoon. All he needed were copies of my driver’s license, passport, social security card (Armenian) and the vehicle registration/title. To prove that the car is insured, you have to place a sticker that you’re given on the windshield adjacent to the inspection sticker.

The policy only covers the costs of repair for the vehicle that has incurred damage in an accident. Collision insurance–where a motorist at fault in a fender bender is covered for his own damage to his vehicle–costs a few hundred dollars from what I’ve been told, and that’s a separate policy altogether.

The actual cost of the insurance is based on how many years of driving experience you have and how powerful the car’s engine is. Since my Niva only produces around 70 horsepower and has a four cylinder engine, not to mention my 22 year-long driving history, I only had to pay 25,000 dram for my policy, and that’s an annual fee. Hopefully, in a year it won’t increase — if anything it should decrease since my car will be 12 years old then. But since Armenia thrives in a paradox market where the rules of supply and demand are not always in play, I won’t be surprised if I have to pay a little more for insurance next year.

Anyway, that’s one less headache to worry about before the New Year.

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