The Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market
How does a voluntary motor vehicle insurance contract differ from a compulsory civil liability insurance contract for vehicle owners?
According to paragraph 6 of Article 806 of the Civil Code of the Republic of Kazakhstan, voluntary insurance is insurance carried out based on the will of the parties. The types, terms, and procedures for voluntary insurance are determined by the agreement between the parties.
A voluntary motor vehicle insurance contract is an agreement entered into at the discretion of the parties, where the types, terms, and conditions of insurance are defined directly by the insurance company and the policyholder. Such a contract may include an extended list of risks (e.g., damage to the vehicle itself, theft, fire, and others), as well as additional services and conditions mutually agreed upon by the parties. Voluntary insurance is governed by the provisions of the Civil Code and the internal rules of insurance organizations.
In Kazakhstan, there are two main types of auto insurance:
Compulsory civil liability insurance of vehicle owners, and
CASCO (comprehensive motor insurance).
Compulsory insurance covers the driver’s liability toward third parties. That means if the driver is at fault in a traffic accident, the insurance company will compensate the damage caused to the injured party. However, the driver must pay for the repair of their own car. If there is no policy, all expenses for restoring someone else's property fall on the person responsible for the accident. Driving without this policy is prohibited, and managing a vehicle without it results in a fine.
CASCO is not an abbreviation, as many believe. The word "CASCO" comes from the Spanish word casco, meaning "helmet," or from Dutch, meaning "hull" or "body."
CASCO is voluntary insurance that covers damage to your own vehicle, whereas compulsory third-party liability insurance covers liability to third parties. This type of voluntary auto insurance provides protection against loss or damage to the vehicle in various unforeseen situations, including accidents, theft, fire, and natural disasters. In such cases, the insurance company undertakes to compensate the damage or repair the vehicle according to the terms of the contract.
It is important to remember that before purchasing a CASCO policy, one should carefully review the list of risks covered by this type of insurance.
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