Private car owners could soon be required to buy motor insurance if a planned law amendment gets the green light, stoking optimism that such a bill could put the brakes on Cambodia’s high rate of hit-and-run accidents.

Currently, only commercial vehicles, such as buses, legally require motor insurance. However, the Ministry of Economy and Finance – which oversees the insurance industry – has proposed that private car owners be forced to take out third-party liability insurance, which covers damages in an accident caused by the insured.

“Right now, the law is awaiting approval from the Council of Ministers, after which it will be sent to the National Assembly for voting,” said Chhay Rattanak, chairman of the Insurance Association of Cambodia (IAC), which represents the insurance companies in the Kingdom.

The proposed amendment excludes motorbike owners because “they may not have enough money”, he said. The IAC also has to discuss premiums with the Ministry of Economy and Finance, although costs would, “of course, be cheaper” than current rates for commercial vehicles, to keep the proposed insurance affordable, he said.

Cambodia has a high rate of traffic accidents, yet is probably the only ASEAN country without compulsory insurance for private vehicles, he added.

Handicap International’s road safety program manager, Ear Chariya, said the proposed law would alleviate the “serious problem” of hit-and-run in Cambodia. Such incidents make up almost half of all road fatalities, and one in three traffic accidents in the Kingdom, according to a Handicap International report.

In March this year, for example, the Post reported that a 23-year-old medical student killed three children and seriously injured six people when her car crashed into a crowd of motorbikes, cyclists and pedestrians after she led police on a chase down Norodom Boulevard, where she had earlier hit a motorcycle.

Many uninsured drivers flee as they are afraid they cannot afford compensation, a situation that might change with the proposed law, said Ear.

However, the scheme should also include motorcylists, who are involved in 70 per cent of all accidents that cause fatalities. “If we exclude them, we will exclude the majority of the people involved in road crashes,” he added.

Infinity Insurance’s CEO, David Carter, estimates that less than one per cent of the cars in Cambodia have insurance. To ensure the insurance premium remains affordable, the government would likely mandate it to cover third-party damages involving people – such as passengers and pedestrians – and not damages to other cars, he speculated, as is the norm in other countries with compulsory motor insurance.

However, one stumbling block is that many vehicles in Cambodia remain unregistered, and cannot qualify for motor insurance, Carter added.

Another challenge, said Forte Insurance’s general manager, Youk Chamroeunrith, is insurance companies here “do not have enough branches to absorb [increased] demand from the market”. While companies can usually also rely on insurance agents, they are hard to recruit in Cambodia, because getting a license requires a $10,000 deposit with the National Bank of Cambodia, he said. His company, for example, had no agents.

Cambodia had 1,977 traffic-related deaths and 5,352 injuries last year.