Azerbaijan.US
After road accidents in Azerbaijan, insurance compensation is frequently delayed – sometimes for weeks, and in some cases for months. While documents are collected and damage assessments are completed, payments to drivers often fail to arrive within the legally required timeframe.
Insurance experts say the problem is not the absence of regulation, but the lack of enforcement.
According to insurance specialist Rusal Badalov, Azerbaijani law obliges insurance companies to pay compensation within seven business days after the damage amount is confirmed. If the payment is delayed, the injured party is legally entitled to a penalty of 0.1% of the compensation amount for each day of delay.
“In practice, very few drivers demand this penalty,” Badalov says. “As a result, insurance companies face little real pressure to make payments on time.”
The expert notes that the current penalty rate is too low to serve as an effective deterrent. Because the financial cost of delaying payments is minimal, insurers often see no urgency in meeting deadlines.
Badalov argues that the situation would change if drivers consistently exercised their right to demand late-payment penalties. More importantly, he believes legislative reform is needed.
He proposes increasing the penalty for delayed insurance payouts to 5-10%, which would create tangible responsibility for insurers and incentivize timely payments.
“If drivers know they will reliably receive full compensation within seven business days, trust in insurance companies will grow,” Badalov said. “That trust is essential for the healthy development of the insurance sector.”
