“The new law on mandatory civil liability insurance for car owners will enter into force on January 1, 2025. The cost of policies will increase. This was reported by the press service of the NBU. The cost of policies As noted in the press service, the information that from the beginning of the year autocivilka policies will immediately increase in price by 2-2.5 times is not true. According to the NBU, the new law is valid”, — write on: ua.news
The new law on mandatory civil liability insurance for car owners will enter into force on January 1, 2025. The cost of policies will increase.
This was reported by the press service of the NBU.
Cost of policies
As noted in the press service, the information that from the beginning of the year autocivilka policies will immediately increase in price by 2-2.5 times is not true.
According to the NBU, the new law really gives insurers some freedom in determining the cost of the policy, which will depend on the personal history of the driver. Therefore, the price increase will primarily concern customers who have had a negative history of getting into road accidents or who belong to the category of drivers who are more likely to be involved in road accidents (for example, drivers with little driving experience or in large cities).
“The scale of such an increase, according to preliminary estimates, in the conditions of high competition in this market, will amount to about 25-30%,” the report says.
The NBU also reminded that the new law does not terminate the validity of existing policies, but only applies to new ones. And for preferential categories, the possibility of issuing a policy for 50% of its cost remains.
Paper policies
The regulator also refutes another myth that paper policies will become invalid from the beginning of the year.
“No. The transition to the electronic format of “autocivilka” contracts will be carried out gradually. In just one year, from January 1, 2026, the final transition from paper to electronic policies is expected with mandatory entry into the electronic centralized database of the Motor (Transport) Insurance Bureau of Ukraine,” the NBU said.
The Central Bank believes that this will finally leave the practice of concluding paper contracts in “vans” and numerous cases of fraud in the past.
Sale of policies
The NBU denies the information that the new law will significantly complicate the sale of policies.
“No. We are really determined to stop the semi-legal trading of policies at below-market prices, which has distorted competition for many years, and fundamentally change the regulation of insurance intermediaries. However, according to the NBU’s estimates, the majority of companies on the market are able to meet the new requirements, in particular in terms of consumer rights protection, and are ready to increase the number of customers due to the displacement of unscrupulous players from the market,” the report says.
As noted in the NBU, the new law should transform a popular insurance product from a formal piece of paper for the police into an effective tool for covering the risks of the car owner, as it contains the following innovations:
- cancellation of the wear factor and introduction of the principle that insurance compensation should ensure bringing the car to the condition it was in before the accident;
- the introduction of direct settlement of damage to a car as a result of a road accident, or the possibility of the victim to apply for an insurance payment to his insurer;
- limiting the deadline for the decision on insurance payment to 90 days and introducing a penalty to the insurer for violating such a deadline;
- abolition of the limitation of the maximum amount of insurance compensation according to the European protocol;
- making payments by the MTSU in place of an insurer whose license has been revoked, even before the completion of the corresponding court case on bankruptcy and final liquidation.
Norms of the law
In May 2024, the Verkhovna Rada adopted a new law on mandatory civil liability insurance for owners of land vehicles, replacing the law that had been in effect since 2005.
The new one provides for a gradual increase in the maximum amount of insurance compensation:
from January 2025:
- for damage to life and health – from 320 thousand hryvnias to 500 thousand hryvnias;
- for property damage – from 160,000 hryvnias to 250,000 hryvnias;
from January 2026, but after the end of martial law:
- for damage to life and health – up to 1 million hryvnias;
- for property damage – up to 2 million hryvnias;
within four years from the moment Ukraine joined the European Union:
- for damage to life and health – up to the equivalent of 1.3 million euros per injured individual and 6.45 million euros per insured event;
- for property damage – up to the equivalent of 1.3 million euros for one insured event.
In case of annulment of the license to the insurer, payments for it will be made by the MTSU, without waiting for the completion of the bankruptcy court case and final liquidation.
It should be noted that the increase in the amount of compensation in the event of a road accident previously led to the fact that the cost of motor insurance policies increased.
Previously, the National Bank changed the conditions of mandatory civil liability insurance for owners of land vehicles. It is, in particular, about increasing the amount of compensation in the event of a road accident. Corresponding changes lead to an increase in the cost of the “autocivilka” policy.
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