Why Your "Elzeme" Car Insurance Might Not Be Enough

As per Lebanese regulations, owners of motor vehicles registered in Lebanon must obtain a compulsory car insurance policy “Elzeme''. This insurance covers bodily injury and/or death caused by the insured vehicle to a third party.

Prior to the devaluation of the Lebanese currency, the Elzeme policy that covered up to $500,000 - costing between L.L 65,000 and L.L 90,000 - used to provide adequate coverage. Amid the financial crisis that Lebanon is passing through, 2 main problems aroused:

1. Modifications in terms of coverage and tariffs of the Elzeme policy came late.

Very few insurance companies took the initiative to modify the prices and cover amounts of Elzeme policies up until recently. Meaning that many car owners renewed their Elzeme policies based on old tariffs and are currently underinsured.

If you renewed your Elzeme policy for LBP 90,000, then you’re covered for LBP 750 million which equals approximately $27,000 (based on June average black market rate of: 28,000). So, you’re underinsured with a gap of $472,000.

2. Recent modifications on Elzeme cover amounts are important but not enough.

The Lebanese government promulgated a new law obliging insurance companies to upgrade the tariffs and cover amounts of Elzeme policies. The new standard price for the Elzeme policy is around LBP 400,000 covering up to 5 billion Lebanese pounds.

If we do the quick math, LBP 5 billion equals approximately $178,000 (based on June average black market rate of: 28,000). So, a gap still exists compared to the limits of the cover that used to be in place prior to the local currency crisis.

It’s important to mention that many insurers - at least the ones we work with - came up with an excess of compulsory cover that comes with Motor All Risk Policies. This cover boosts the cover limit of the Elezme policy to match approximately the $500,000. Hence, the gap in compulsory cover would be excessively reduced.

Key takeaways

• Make sure that the cover amount of your compulsory car insurance is no less than: 5 billion. If you already renewed your elzeme policy based on old tariffs , complement it by getting a new one with a higher cover limit.
• If your budget allows it, consider getting an All Risk Motor Insurance that provides you with the excess on compulsory cover. This policy extends to cover your own material damage, providing you with a complete protection for your safety on the road. 

Our experts can provide you with personalized recommendations so you make confident decisions about your coverage and choice of insurer. Reach out by clicking below.