Why motor insurance mirrors the whole market
OSAGO (compulsory motor third-party liability insurance) is the most widespread type of insurance in Russia: every car owner must have a policy, and most people first encounter insurance through it. That is why motor insurance clearly shows two perennial market issues: who sells policies and how, and how the amount of damage is determined after a road accident.
Who sells the policy
An OSAGO or KASKO (voluntary motor hull insurance) policy can only be issued by an insurance company licensed by the Bank of Russia. It can be sold by the company itself — at an office or on its website — or by an intermediary. The Russian Law "On the Organisation of Insurance Business in the Russian Federation" distinguishes two types of intermediaries:
- an insurance agent — an individual, sole proprietor or company acting on behalf of and on the instructions of the insurer;
- an insurance broker — an intermediary licensed by the Bank of Russia that may act in the interests of the policyholder or the insurer.
An agent is the face of the insurance company. The insurer is liable to the client for the agent's actions within the agent's authority, so companies have an interest in training and monitoring their network.
Electronic policies removed some of the problems
Since 2017 all insurers offering OSAGO have been required to sell electronic policies through their websites. Data on every contract goes into the OSAGO automated information system, so forged paper forms and "double" policies with the same number are practically a thing of the past. But fraudsters have moved online: there are copycat insurer websites and "agents" selling non-existent policies.
How to check an intermediary and a policy
- ask the agent for a power of attorney or contract with the insurer and check the company's details;
- pay for the policy only to the insurance company's account or through its official channels;
- after buying, check the policy by its number in the database of the Russian Union of Motor Insurers (RSA) — the car details and the list of drivers must match;
- do not agree to "mandatory" add-ons: the law prohibits making an OSAGO contract conditional on buying other insurance.
How damage is assessed under OSAGO
For many years the main dispute after an accident sounded like this: the assessor came up with one figure, and the repair cost another. In Russia this issue is addressed by several mechanisms.
The Unified Methodology
The cost of restoration repairs under OSAGO is calculated using the Unified Methodology approved by the Bank of Russia (Regulation No. 755-P). Prices for parts, materials and the standard labour hour come from RSA reference books for the specific economic region. As a result, the calculation is the same for all insurers and experts, and arbitrary "standards" are not used.
Repair instead of money
Since 2017, for passenger cars owned by individuals and registered in Russia, the priority form of compensation has been repair at a service station (STOA) with which the insurer has a contract. When the car is repaired on the insurer's referral, wear and tear of parts is not deducted, and the insurance company is responsible for the quality of work. Compensation is paid in money in the cases listed in the law — for example, if the car is a total loss, if the insurer has no suitable service station, or by written agreement of the parties. A cash payment is calculated with wear and tear of replaced parts deducted.
Inspection and independent assessment
The insurer must inspect the damaged car and arrange an independent technical assessment. If you disagree with its results, you can commission your own assessment, and in a dispute rely on the assessment ordered by the financial ombudsman.
KASKO: each company has its own rules
For voluntary KASKO the Unified Methodology is not mandatory. The way damage is determined, the list of service stations (dealer or not), the deductible and the treatment of wear and tear are set out in the specific company's insurance rules. Loss of market value, towing and a replacement car are also matters of contract. That is why two policies with the same price can differ greatly when a claim is settled.
Practical tips for car owners
- Buy OSAGO on the insurer's website or through a reliable intermediary; keep the receipt and the electronic policy.
- After an accident, photograph the scene and the damage immediately; if conditions allow, file a European accident report (europrotocol) via the Gosuslugi Auto app.
- Do not repair the car before the insurer has inspected it.
- When you receive a repair referral, check the service station, the timing and the list of works; if you are offered money instead of a repair, ask on what grounds.
- For KASKO, compare in advance how different companies determine damage — this matters more than the price difference.
You can compare offers in the OSAGO and KASKO sections and estimate the price with the OSAGO calculator. If the insurer delays payment, see our article on what to do if your claim is refused.