Vehicle insurance costs to go up in November

October 26, 2016

The National Insurance Institute (INS) will begin collecting mandatory vehicle circulation permits, or marchamos, for 2017 on Nov. 1, and motorists will likely have to pay more than they did for this year.

The INS announced last week that the Automobile Insurance Policy (SOA) for next year will cost 6.8 percent more on average. The SOA represents almost a fifth  of the total cost of the marchamo; the rest is made up of other fees including a property tax.

The SOA for 2017 will cost ₡21,654 for cars ($39), which is 8.5 percent more than last year. Motorcycle owners will have to pay ₡61,119 ($109), representing a 5.2 percent increase, Insurance Superintendency (SUGESE) officials indicated.

The owners of Costa Rica’s more than 1.4 million registered vehicles must pay their marchamos by Dec. 31. Starting on Jan. 1, drivers without the 2017 marchamo sticker displayed on their vehicles will be fined some ₡50,000 (approximately $90) and have their license plates removed.

Accidents on the rise

The main reason for the increase in the SOA price is a spike of almost 30 percent in the number of traffic accidents recorded in the first eight months of this year, the Insurance Institute reported.

The number and severity of accidents influences the policy’s yearly prices, as funds collected from the insurance policy need to cover INS costs derived from traffic accidents that year.

Insurance Superintendant Tomás Soley said that there were 17,957 traffic accidents from January to August, representing a 27 percent increase over the same period last year.

Motorcycle accidents, at 9,546, represented more than half of that total. Motorcycle accidents increased by 67 percent over 2015 figures, according to SUGESE.

Automobile accidents in the eight-month period totaled 4,499, representing an increase of four percent over last year’s figure.

INS Executive President Elián Villegas said at a press conference last week that the number of accidents recorded so far this year, particularly those involving motorcycles, is “excessive.”

Villegas said the increase in traffic accidents this year will lead to some ₡1,5 billion ($2.6 million) in SOA funds. The INS will be forced to use a special fund reserve to cover costs of the increased number of accidents.

Marchamo collection

The biggest component of the marchamo is the vehicle’s Property Tax, which represents 70 percent of the total cost. The Finance Ministry will report the variation in that tax before Nov. 1.

The SOA accounts for 19 percent of the yearly cost of the marchamo. The remaining 11 percent is distributed among other taxes.

Motorists will be able to check the exact amount they owe for the 2017 marchamo starting Nov 1. at the INS website, by phone at 800-TELEINS (8353-467), or at INS branches, banks and other authorized businesses across the country.

INS records state that vehicle owners failed to pay some 80,000 marchamos this year. Those vehicles are no longer allowed to circulate on the streets.

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