Ethiopia implements a new vehicle insurance policy. Previously, the maximum death claim was capped at 5,000 birr, but the new policy raised this to 30,000 to 250,000 birr.
The policy was introduced in response to the rising frequency of vehicle accidents across the country, which have led to significant loss of life and property. The Ethiopian government has mandated third-party insurance coverage for vehicle accidents to protect victims who often face severe financial hardship when the responsible party is uninsured.
While some hail the reform as necessary, others criticize the lack of transparency surrounding the changes. The sharp increase in premium costs, which has seen private car insurance fees rise from 500 birr to over 2,000 birr, has also sparked fears that drivers may choose to forgo insurance altogether. In addition, insurance industry insiders have expressed concerns about the abrupt revision of tariff rates, noting a lack of clear communication. Despite this, the Ethiopian Insurers Association defends the policy, asserting that it addresses long-standing concerns over inadequate compensation for accident victims.
Source: Capital Newspaper
