There is a push to give Russian drivers a chance to cancel OSAGO contracts early and receive compensation proportional to the unused portion of the policy. A bill addressing this proposal has been submitted to the Cabinet of Ministers by the LDPR faction, as explained by Yaroslav Nilov, a deputy chairman of the faction. The aim is to balance outcomes so that motorists aren’t left bearing the full burden when they stop using their vehicle before the policy term ends.
Nilov pointed out that the current setup tends to favor insurers, with the compensation for the driver calculated according to a predefined formula that can reduce the perceived value of cancelling a policy mid-term. The proposed change would shift that balance, ensuring that a motorist who terminates the OSAGO contract after a portion of the term has elapsed would receive reimbursement corresponding to the unused portion of the coverage.
Nilov argued that the practical effect of the OSAGO agreement can evolve over time. A driver might lose driving rights, switch to limited vehicle use for only certain periods, face difficulties obtaining spare parts for repairs, or even be drafted for service obligations. In such situations, the driver and insurer could face misaligned incentives under the existing rules, making early termination with proportional refunds more sensible for both parties.
- Earlier reports indicated that the government approved another LDPR initiative to shorten the minimum OSAGO contract duration to one month, which could complement broader reforms of the policy framework.
- An LDPR statement noted that the party advocates for proportional refunds to reflect actual use of the vehicle during the policy term.
In discussions surrounding OSAGO reforms, stakeholders emphasize creating a fair, predictable process for drivers who need to adjust or end their coverage before term end. The overarching goal is to reduce friction for legitimate changes in a driver’s circumstances while maintaining financial stability for insurance providers and ensuring regulatory clarity for the market. The proposed approach would require careful calibration of refund calculations to reflect remaining risk, potential underwriting implications, and administrative feasibility, so that both motorists and insurers can anticipate outcomes with greater confidence.