Cheaper OCTA? Only for those who truly deserve it
Latvian drivers could get cheaper compulsory motor insurance if insurers considered not only accidents but also daily driving habits like speeding and aggressive driving. Currently, the system is unfair because careful drivers pay along with reckless ones, as insurers lack data on minor violations.
Several years ago, Latvia abandoned the Bonus–Malus system, which divided drivers into 17 risk classes, in favor of a simpler principle: fewer accidents mean a lower price. However, in reality, insurers only have information about accidents, not about regular speeding or aggressive driving unless recorded by police. This means a driver can ignore rules for years and, as long as they don't cause an accident, the system sees them as a "good" client. Consequently, responsible drivers pay for the irresponsible ones.
Discussions about using broader violation data have been ongoing, but counterarguments involve privacy, regulations, and data protection. Yet systematic rule-breaking is not just a private matter – it is a risk that everyone else covers. Elsewhere in Europe, this issue is handled pragmatically by considering driving behavior. For example, in Italy, millions of OCTA policies are based on telematics data, where "black boxes" accurately assess risk and set fair prices. In Latvia, car-sharing services already use such systems.
The Latvian Motor Insurers' Bureau (LTAB) is analyzing possibilities and working on solutions to encourage drivers to share their driving data. Discussions with state and private partners are underway, but implementing full solutions is expensive and time-consuming. With the development of artificial intelligence, such data could become a practical tool for OCTA pricing.
It is important that data usage is voluntary and transparent. If a person proves they drive safely, why shouldn't they pay less? Cheaper OCTA doesn't start at the insurer's office – it starts the moment you start the vehicle.
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