DPVAT should get a new model due to lack of resources – 04/14/2023 – Market

The government of Luiz Inácio Lula da Silva (PT) is studying a solution for the DPVAT, insurance that indemnifies victims of traffic accidents and which had the payment – ​​until then mandatory for vehicle owners – extinct during the government of Jair Bolsonaro (PL).

Coverage for users continues, gradually depleting the resources of the fund currently managed by Caixa Econômica Federal. The forecast is that the money available will only last until the end of the year.

To assess the situation, the government decided to create a working group with a three-month deadline to draw up a final report. There are different alternatives on the table, based on multiple models around the world.

In some countries, for example, there is no charge and no accident insurance. In others, insurance is provided free of charge by the state.

There are also international examples in which coverage is provided by the State, but financed by fees charged to the driver. There are still cases in which drivers need to take out insurance, but freely choosing the company.

In Brazil, a model of regional concessions is also under discussion, dividing the country into areas and choosing, after a public process, the insurance companies that would provide the service locally. It is also not ruled out that the DPVAT will be financed through the Budget, with resources from the National Treasury.

According to people involved in the discussions heard by the Sheetthere are two major challenges to be faced.

The first is that there is a social issue to be observed, since low-income people tend to be more exposed in traffic – largely due to the use of motorcycles, which are more susceptible to accidents.

Motorcycles are involved in 76% of DPVAT compensation claims. Leaving a freer market, and potentially without protection, could be especially harmful for facts linked to this stratum.

The other challenge is the potential unpopularity of the measure. The establishment of a payment to be made by the population may face great resistance, such as the recently announced initiative that began to tax imports of up to US$ 50 sent by individuals and also destined for individuals (which should affect Asian websites of electronic commerce, who are accused of defrauding the mechanism to take advantage of the exemption).

Those involved in the discussion report that, so far, there is no preference for one or the other model and the debates will serve to define the technical conclusion on the subject. The topic will need to be taken up later by the government for higher consideration.

The possible return of payments is closely monitored by companies in the sector. They defend an open and competitive model in which all insurers can compete to offer the lowest possible cost within the coverage established by law.

Dyogo Oliveira, president of CNSeg (National Confederation of Insurance Companies), uses as an argument the fact that Brazil has a high rate of traffic accidents, with 30,000 dead and 300,000 seriously injured in 2021.

“It is necessary to re-establish a system of protection, of aid to the injured, to people victimized in traffic”, he said this week at an event in the sector.

“We recently presented the government with a proposal for the creation of a competitive mechanism, with free participation by companies, with tariff freedom, so that companies can enjoy this market and that Brazilian citizens have access to insurance that will protect the entire population with relation to traffic accidents”, he said.

Since the beginning of 2021, Caixa has managed DPVAT resources on an emergency basis. The definitive legal authorization, given in April 2023, refers to claims that occurred only until December 31 of this year.

According to the bank, more than R$ 1.8 billion have already been paid by the institution through the DPVAT for 510,000 claims for compensation to the victims.

Of the total payments made by CAIXA between January 2021 and March 2023, 23.4% were related to accidents that resulted in the death of the victim, 62% were for compensation for permanent disability and 14.6% for the cost of medical expenses .

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KNOW MORE ABOUT DPVAT

What is insurance?

The DPVAT (Personal Damage Caused by Land Motor Vehicles) is insurance to protect against personal injury, whose payment was mandatory until 2021 and was extinguished by the Bolsonaro government. It was owed annually by owners of land vehicles such as motorcycles, private cars, taxis, rental cars, buses and minibuses.

How does it work?

In the event of a traffic accident, the insurance covers up to BRL 2,700.00 of medical expenses, when not incurred by the SUS (Unified Health System). In case of permanent disability or death, the victim or his family receives up to R$ 13,500.00. DPVAT Insurance does not cover property damage.

Who administers?

According to a note from the Ministry of Economy in 2019, DPVAT Insurance was administered in the form of a monopoly by Seguradora Líder-DPVAT, consisting of 73 insurers. Since 2021, it has been administered on an emergency basis by Caixa.