Numerous roadside vendors display advertisements for motorcycle insurance with an annual premium as low as VND 10,000. Photo: Văn Nguyện.

Roadside vendors selling motorcycle insurance along various routes in Ho Chi Minh City have been spotted advertising policies with annual premiums as low as VND 10,000.

This price point is significantly lower than the few hundred thousand dong charged by many other vendors, sparking curiosity among potential customers.

You Won’t Always Get the VND 10,000 Insurance

Posing as a prospective customer, our reporter approached one of these vendors to inquire about the extremely affordable VND 10,000 insurance plan they were advertising.

“The VND 10,000 policy is for voluntary insurance. However, customers cannot purchase this insurance alone as it is sold together with the compulsory insurance,” the vendor explained.

It is not uncommon to see roadside vendors advertising motorcycle insurance for as low as VND 10,000 per year. Photo: Phúc Hậu.

In other words, customers must agree to purchase the compulsory third-party liability insurance for motorcycles, priced at VND 66,000 per year, in order for the vendor to also sell them the voluntary insurance, which typically costs between VND 10,000 and 20,000 per year.

Consequently, despite the enticing advertisement, customers would actually need to spend no less than VND 76,000 to obtain a valid set of insurance certificates.

According to an anonymous insurance consultant, there are indeed cases where roadside vendors agree to sell the voluntary insurance separately to insistent customers without requiring the purchase of the compulsory insurance.

“The insurance certificate consists of two parts: one for voluntary and the other for compulsory insurance. If a customer refuses to buy the compulsory insurance, the vendor will simply cross out that section,” they explained.

Super Cheap Insurance Doesn’t Exist

The insurance consultant further clarified that the annual premium for a legitimate motorcycle insurance policy cannot be as low as VND 10,000 or 20,000, as advertised by some roadside vendors.

“While some vendors may offer discounts on the compulsory third-party liability insurance, the price is unlikely to go below VND 35,000 to 40,000. Therefore, the VND 10,000 annual insurance advertised by some vendors actually refers to voluntary insurance for passengers,” they elaborated.

Motorcycle insurance policies typically include both compulsory third-party liability insurance and voluntary insurance. Photo: Phúc Hậu.

Essentially, there are two main types of motor vehicle insurance: compulsory third-party liability insurance and voluntary insurance.

The former is designed to provide compensation to third parties in the event of an accident, while the latter covers the policyholder’s own vehicle in case of accidents or incidents causing damage.

According to Article 21 of Decree 100, traffic police may impose a fine ranging from VND 100,000 to 200,000 if a vehicle owner or driver fails to present a valid compulsory third-party liability insurance certificate when requested.

Roadside Insurance Policies Are Still Valid

In an interview with our reporter, Mr. Nguyá»…n VÄ©nh, an insurance consultant based in Ho Chi Minh City, confirmed that, fundamentally, the motorcycle insurance policies sold by roadside vendors are valid and will be honored by the insurance company in the event of a claim.

“There is always a slight risk of purchasing counterfeit insurance, but such cases are rare. Therefore, motorcycle insurance bought from roadside vendors is generally valid,” Mr. VÄ©nh assured.

While there is a small chance of encountering counterfeit insurance at roadside vendors, the likelihood is quite low. Illustrative image: Phương Lâm.

In its market overview report for the first nine months of the year, the Vietnam Insurance Association revealed that the total premium income from motor vehicle insurance reached VND 13,040 billion, accounting for 26.2% of the total market revenue and representing a 17.2% increase compared to the same period last year.

Additionally, with a total compensation payout of VND 6,126 billion, the compensation ratio for motor vehicle insurance was assessed to be relatively high, at 47% of the total premium income.

Specifically, the premium income from compulsory third-party liability insurance for motor vehicles in the first nine months reached VND 3,221 billion, a 14.6% increase year-on-year. The compensation payout for this type of insurance during this period amounted to VND 562 billion, corresponding to a compensation ratio of 17.4%.

On the other hand, the premium income from voluntary motor vehicle insurance reached VND 9,819 billion, marking an 18% increase compared to the same period in the previous year. Notably, the compensation payout for voluntary insurance in the first two quarters was VND 5,564 billion, resulting in a compensation ratio of 56.7%.

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