Guatemala Abandons Controversial Mandatory Car Insurance Law Amid Protests

In a swift response to escalating protests, the Guatemalan government has retracted a controversial decree mandating compulsory car insurance.

Following two days of rising tensions and protests, Guatemalan President Bernardo Arévalo announced the withdrawal of a newly proposed law that would have mandated car insurance across the country. The decree, which aimed to address the need for compensation in traffic accidents following a tragic bus incident that claimed more than 50 lives, was met with widespread discontent among citizens who argued financial constraints made such insurance unaffordable.

The proposed law required all vehicle owners—covering cars, trucks, buses, and motorcycles—to secure insurance that insured harm to others in the event of an accident. Many Guatemalans, grappling with economic hardships (with roughly 55% living in poverty), voiced their opposition as thousands took to the streets, obstructing key highways and clashing with law enforcement.

In a press conference held Wednesday, President Arévalo expressed his commitment to implementing crucial reforms while acknowledging the challenges posed by the new decree. He underscored the importance of a comprehensive transport law that could potentially improve road safety, as traffic accidents are a leading cause of death in the nation.

After discussions with protest leaders, both parties agreed on the formation of a technical committee aimed at developing a practical implementation plan for mandatory car insurance within a year. Protesters had raised concerns about the law being unveiled without sufficient transparency regarding the associated costs that motorists would likely face, leading to the uproar that saw parts of Guatemala City come to a standstill, affecting schools and businesses.