Authorities have begun enforcing a new proclamation that sets third-party car insurance premiums up to five times higher than before, with rates reaching as much as 4,360 birr for private vehicles annually, according to the country's transport ministry.
Car ownership is rising in Ethiopia with over 1.4 million vehicles on the road, as the economy grows at nearly 10 percent annually. While premium levels remain low globally, the higher rates under the new law intend to move Ethiopia closer to international standards.Â
Under the law, premiums for privately-owned gasoline vehicles will range from 2,641 birr for smaller engine cars to 4,360 birr based on engine size and passenger capacity. Electric cars will face equivalent premiums to gasoline cars.
Commercial vehicles like buses will pay as much as 11,550 birr depending on passenger numbers. It reaches as much as 18,137 in case of heavy trucks. Â
The ministry also announced changes to streamline accident compensation by increasing medical and injury payouts.
The new rule has also outlined reforms to streamline compensation processes, including raising medical coverage to 15,000 birr and increasing injury/death compensation caps to 250,000 birr.
