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Kindlustus - 27.07.2020

What types of damage are covered by motor third party liability insurance?

What types of damage are covered by motor third party liability insurance?

Motor third party liability insurance (motor TPL insurance) indemnifies, in the event of a case covered by the insurance, property damage and personal injuries caused by the owner of the vehicle to other persons. However, people often do not know why motor TPL insurance should be compulsory, what differentiates the policies of various undertakings, and what the price of the insurance policy depends on.

‘Motor TPL insurance is liability insurance: if a person causes damage to other people and they have a motor TPL insurance policy, the insurance undertaking indemnifies the victim for the damage caused. On the other hand, the insurance does not cover damage that the person at fault for the traffic accident caused to themselves,’ explains Jaanus Tanne, Head of Motor Claims at PZU Estonia. The insurance undertaking may indemnify self-inflicted vehicle damage if the person has optional motor vehicle insurance.

Regarding motor TPL insurance, we have all noticed that the insurance premiums of insurance undertakings vary greatly. If I do not benefit from the compulsory motor TPL insurance and the insurance only covers the damage of the victim in the case of a traffic accident I caused, why should I pay more for the policy? According to Tanne, choosing the right undertaking is very important: ‘As of 1 January 2015, the victim of a traffic accident may turn to and claim indemnity for the damage from their own insurance undertaking. While the previous situation did raise a legitimate question of why would anyone not choose the cheapest service provider, insured persons have been able to claim indemnity as victims in a traffic accident from their own insurance undertaking for five years now, which is certainly more convenient, more reliable, and often includes significant benefits for the policyholder.

Before 2015, the victim in a traffic accident had to turn to the insurance undertaking of the person who caused material damage to them, but now, they have two options: they can claim indemnity from their own insurance undertaking or that of the person who caused the traffic accident. PZU’s statistics show that people like to deal with the undertaking they chose – more than a quarter of people who suffered traffic damage turn to their own insurance undertaking.

However, there are certain criteria in choosing an undertaking after a traffic accident: the vehicles must be insured in Estonia, the parties must agree on the circumstances of the accident, the case cannot involve personal injuries, and the total amount of damage must not exceed 10,000 euros.

Why is it important to have compulsory motor TPL insurance?

According to statistics, even the most minor fender bender between two cars means damage in the amount of at least 1,500 euros. More significant damage, of course, is the result of personal injuries where people might suffer traumas with lifelong effects as a result of a traffic accident, in which case the insurance undertaking pays them indemnity instead of the person who caused the injuries. However, if the person who caused the traffic accident does not have a policy or they have not paid it, the insurance undertaking has the right to recover the money from the person who caused the accident.

‘Thus, not paying some twenty euros can sometimes lead to a significant financial claim.’ He adds that although it might seem that a small traffic accident can cause no serious damage, the technology in vehicles becomes more and more complicated every year and treating people becomes more expensive. Where, five years ago, the average vehicle did not have LEDs, cornering lights, and other sensors, they are now standard equipment in most vehicles, significantly increasing vehicle repair costs. A few years ago, a seemingly simple reversal collision ended with repainting the bumper and replacing the grille – now, many cars have radars in their bumpers that cost a few thousand euros.



Gerli Ramler
Freelance journalist


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