Andrey Kosenkov  

Does Insurance in Ukraine Really Work?

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There is myth quite popular in our country that “Ukraine’s insurance doesn’t work”. I’ve been handling insurance claims for a pretty long time already. In my experience there has been not a single unjustified denial. 

In order to dispel the abovementioned disbelief it’s worth looking at main factors which define your chances on being indemnified.

 Lack of Ukraine’s insurance culture

Frequent are the cases when an Insured jeopardizes his chances for indemnification at the very moment of purchasing the insurance policy. First of all, the choice is often defined mainly by the cost of insurance Ukraine’s market has to offer without taking into consideration insurer’s brand, reputation, or policy terms and conditions. Second, sometimes the Insured is biased towards a particular insurance company by the third party (for example, a bank or leasing company worker who has personal interest in them).

By following any of the abovementioned scenarios an Insured is almost bound to be denied indemnity. As a result many people complain of the insurance companies in Ukraine calling them a fraud and neglecting the fact that they themselves initially viewed insurance as means of getting another service. It may be a loan from bank for buying a new car or an apartment.  Basically insurance is purchased not to cover the possible risks, but to fulfill an annoying requirement with minimal expenses without even reading the insurance policy itself. However once indemnity is denied, reading the policy closely usually becomes the first priority. That’s exactly when the clauses which defined the lower cost within Ukraine’s insurance market usually come to light. It may be exclusion of “falling trees” peril from the policy covering a house in the woods, or insuring the drug stores chain without covering the impact of hot steam on the pharmaceuticals, or it may be the clause in CASCO insurance policy stipulating that the indemnity be paid only if a vehicle is driven by drivers older than 35 years with 10 + years of driver’s experience.

Excluding the most probable perils from the coverage allows saving on insurance, on the one hand, but on the other hand it also serves as legal ground for indemnity denial.

Choosing between Ukraine’s insurance companies based on the prices instead of reputation

Obviously, international brand costs more. That’s why foreign insurers’ subsidiaries value their good name and do not deny indemnity unjustly. 

Remember that in Ukraine insurance companies of national origin in most cases will offer the lowest prices, but the claim settlement is also bound to entail problems. On the contrary, insurers of international standing tend to stand by the agreement clauses.
Remember that in Ukraine insurance companies of national origin in most cases will offer the lowest prices, but the claim settlement is also bound to entail problems. On the contrary, insurers of international standing tend to stand by the agreement clauses.  

When it comes to Ukrainian insurance a group of companies represents a separate type of insurers. They initially sell policies at the damping price with no further intention to satisfy the indemnity claims.  Motor third party liability insurance policies are the vivid examples of such behavior. For instance, in accordance with current Ukrainian legislation the minimal price for the regular MTPL policy for the vehicle registered in Kyiv cost UAH 1,034 while some insurers offer it at a price UAH 500 – 600.  Can an Insured count on being indemnified? The answer is obvious.

In addition it’s worth stressing out that claim settlement begins at the moment of concluding insurance agreement. It’s wise to be careful, attentive and not to save on the insurance quality. 


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