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Third-party insurance to be based on vehicle power

Beginning in 2011 compulsory third-party vehicle-insurance tariffs will be based on vehicle power instead of engine size measured in cubic centimeters, according to new Finance Ministry regulations published in the official journal Magyar Közlöny.

Cars will be classified in six groups in which those with a maximum output of 37 kilowatts will be in the first, cheapest category and those with output of 180 kilowatts or more will be in the sixth, most expensive category.

The new system will probably make insurance more expensive in general, analysts say. There are almost no new cars on the market with an output less than 37 kilowatts, and cars with a 1,400cc engine, presently in one of the lowest categories, will be in the fourth group from 2011 if their output is at least 71 kilowatts, which is the case with many new cars.

Explaining the orders, the Finance Ministry said that newer cars put out more power with fewer cubic centimeters, and more output means more risks on the road.

Insurance companies must publish their tariffs for next year at the end of this month, which is why the ministry postponed the introduction of the new system until 2011. (MTI-Econews)