Many insurance companies 'embezzle' compensation money

Insurance - Photo 1.

Regulations require the purchase of insurance, but this type of compensation only benefits insurance companies - Photo: Q.DINH

However, customers are not only tortured with complicated procedures, but also have their compensation money cut.

Harassment during the compensation process still occurs openly in the insurance market, despite many legal regulations being issued to reduce procedures and increase benefits for customers purchasing compulsory civil liability insurance (TNDS) for motor vehicle owners (cars and motorbikes) and car physical damage insurance.

Delayed payment, "skimping" compensation money

While riding a motorbike on the road, Mr. NVDuong ( Thanh Hoa ) carelessly hit another person, causing the victim to die on the spot. With the police's guidance, he contacted the insurance company to claim compensation for the victim because he had purchased compulsory motor vehicle liability insurance.

"I followed the police's instructions but the insurance company still made things difficult for me. For two years in a row, they refused to pay compensation with all sorts of excuses," Mr. Duong said indignantly. Meanwhile, due to his family's difficult circumstances, he and his wife had to run around everywhere to send the victim's family to take care of the funeral.

According to the law, the insurance company must pay 150 million VND/life for Mr. Duong to give to the victim's family, partially compensating for the loss. But in reality, the company refused to compensate with the reason "the insurance salesman did not pay the fee to the company, so the company is not responsible"!

Mr. Duong did not accept this "oh my god" reason when he was holding the certificate issued by the company, showing that he had paid for the insurance, so he went to complain. After more than two years of complaining, thanks to the support of someone knowledgeable about insurance, this customer was finally notified by the company that they had accepted the compensation.

It is noted that disputes between insurance companies and customers when compensation is denied, delayed or cut occur quite frequently in the market.

According to the inspection conclusion just announced in April 2025, Vietnam Aviation Insurance Corporation (VNI), the leading enterprise in the market share of motor vehicle insurance in Vietnam, had many violations in the period of 2023, the Department of Insurance Management and Supervision ( Ministry of Finance ) said.

Accordingly, regarding compensation payment, the inspection agency recorded a case of a victim's death, but instead of compensating 150 million VND according to legal regulations so that the car owner has the financial resources to compensate the victim, the insurance company VNI "cut" up to... 80%, only compensating 30 million VND!

Or through a random sampling inspection, it was discovered that 10 cases were required to submit documents from the police agency related to the victims' injuries, while the legal regulations have omitted this procedure.

This is a difficult act, because the victims involved did not die but suffered from traumatic brain injuries, broken collarbones, broken legs, burns, dislocated hips, eye injuries...

In the end, the company compensated from 3 to 24 million VND/case. Not only was the compensation money "cheated", in many cases, customers were also delayed by VNI for up to a year, while according to regulations, compensation must be paid within 15 to 30 days.

Collect 100 dong in insurance premium, compensate... 4 dong!

Not only VNI Insurance, according to the Insurance Management and Supervision Department, the United Insurance Company (UIC) - with capital contributions from three domestic and foreign "giants": Bao Minh Insurance (Vietnam), Sompo Japan Insurance (Japan) and KB Insurance (Korea) - also had many violations in 2023.

Accordingly, the inspector discovered that this insurance company had arbitrarily "cut" the amount of compensation for damages, which was not in accordance with the law.

Specifically, after a traffic accident, someone requested insurance compensation, but the company only paid about 20 million VND, equivalent to an arbitrary 50% reduction, with the reason that the customer "collided with a third party, had no traffic police record"!

In other cases, the company gave the reason of asset depreciation, the company arbitrarily deducted 15% of the compensation for customers. In many cases, the company used the excuse of "biting" off the compensation, in some cases, no reason was given, the customers silently suffered the loss. This is also the reason why the compensation rate of compulsory TNDS insurance accounts for very low revenue.

According to data from the Insurance Management and Supervision Department (Ministry of Finance), the cumulative 11 months of last year's compulsory civil liability insurance for owners of motorbikes, scooters and similar motor vehicles reached nearly VND740 billion, but only about 4% (VND28.5 billion) was compensated.

Thus, these businesses collect 100 dong of TNDS insurance but only spend about... 4 dong to compensate customers for damages (not including other costs).

The situation of embezzlement and arbitrary deduction of compensation does not only occur with customers purchasing compulsory insurance, but also exists with (voluntary) auto physical damage insurance. Data released by the inspection agency in April 2025 shows that in addition to compensation violations, the motor vehicle insurance sector also brings in large sums of money for the "big guys".

Of which, VNI Company earned nearly 111 billion VND in revenue from selling compulsory insurance for motorbike owners, but only compensated a mere 4.4 billion VND, equivalent to a rate of less than 4%. For compulsory insurance for car owners, the company collected nearly 515 billion VND in revenue and compensated approximately 104 billion VND (20%). The small amount of insurance compensation does not mean that traffic accidents rarely occur.

According to the Traffic Police Department ( Ministry of Public Security ), in 2024, there were 21,532 road traffic accidents nationwide, killing 9,954 people and injuring 16,044 people.

There are no official statistics from the insurance company that fully reflect the number of customers - victims who have been made difficult, had their claims cut or were blatantly denied compensation despite having purchased compulsory insurance and (voluntary) vehicle physical insurance.

Rarely seen compensation truth human insurance

Recently, voters from many localities in Binh Phuoc, Dong Nai, An Giang, and Ho Chi Minh City sent petitions to the Ministry of Finance to reflect the difficulties people face in receiving compensation benefits.

Some voters suggested that insurance for two-wheeled vehicles should only be purchased voluntarily, instead of being mandatory as it is now.

Responding to voters in early 2025, in addition to citing evidence that many countries in the world apply this product in the form of mandatory purchase, the necessity for the Vietnamese market, the amendments to the law to reduce procedures and increase compensation benefits... The Ministry of Finance also said that in the coming time, it will "strengthen inspection, examination, and strict handling of violations of regulations on compulsory civil liability insurance of motor vehicle owners (if any)".

At the same time, the ministry will coordinate with relevant agencies to continue researching and simplifying procedures and records for insurance compensation and humanitarian aid payments, ensuring that insurance compensation takes place quickly and in accordance with regulations, avoiding insurance fraud, and actively contributing to the implementation of social security.

It is known that, according to the plan approved by the Minister of Finance, the Department of Insurance Management and Supervision will conduct inspections and examinations of 8 enterprises in compliance with legal regulations on civil liability insurance for motor vehicle owners, including: Postal Insurance (PTI), Bao Minh Insurance (BMI), Military Insurance (MIC), Saigon - Hanoi Insurance (BSH), PVI Insurance, Xuan Thanh Insurance, Bao Viet Insurance and BIDV Insurance (BIC).

Insurance plays the role of "judge"

Many insurance companies 'embezzle' compensation money - Photo 2.

Source: Ministry of Finance - Graphics: TAN DAT

Economic expert Tran Nguyen Dan said that motor vehicle liability insurance is a necessary product to buy. However, if the law does not require it, the number of customers participating in this product may not be large.

The core of this insurance is to protect third parties, compensate for damage to property, body and life. They are victims of the motor vehicle owner causing the accident. Thus, it is urgent to promote compensation so that the victim or relatives (of the deceased victim) can receive money as soon as possible.

Many people are upset not because they have to buy insurance but because the compensation payment is so bad when insurance companies act as "judges", even though that is not allowed.

Whereas the customer should simply submit a notice request, the insurer's responsibility is to assume that the customer deserves compensation.

Unless evidence is found that the customer is not worthy, the company will refuse to pay. Of course, in terms of compensation principles, the insurance company also fully complies with the regulations of the Ministry of Finance, limiting the situation of profiteering.

To facilitate the payment of civil liability insurance compensation for motor vehicle owners (cars, motorbikes) and car physical insurance, according to Mr. Dan, management agencies need to have solutions to promote businesses to use technology in the compensation assessment process.

Accordingly, when an accident occurs, the first thing to do is to rescue the victims and minimize human and property losses. Therefore, people can record videos of the accident scene as evidence, without necessarily waiting for the appraiser to come down. Companies are also not allowed to arbitrarily reduce compensation or impose sanctions for unreasonable reasons.

In addition, insurance companies can also cooperate with taxi and motorbike taxi technology platforms to establish a team of on-site appraisal collaborators. These collaborators will replace the appraisers, still ensuring honesty and objectivity.

"The principle of insurance is to use the majority to compensate the minority. When compensation is satisfactory and people voluntarily participate more, the insurance fund will be larger and compensation will be easier," said Mr. Dan.

According to this expert, the motor vehicle insurance fund also needs to operate more efficiently. When the hospital reports that someone has had a traffic accident and needs support, the fund must immediately step in and pay out money at certain levels.