New law on car insurance: what changes from January 1, 2025
Kyiv • UNN
Starting from January 1, 2025, Ukraine will introduce new rules for compulsory motor insurance. The amount of payments will increase, the system for calculating the cost of policies will change, and a direct settlement mechanism will be introduced.
On January 1, 2025, a new law on compulsory car insurance will come into force in Ukraine, which raises many questions among car owners. UNN explains how this will affect prices and what will change in the rules of motor vehicle liability insurance.
Why are there changes in car insurance?
Compulsory motor insurance is when every vehicle owner must have a policy to cover possible losses in the event of an accident. The law on motor third party liability in Ukraine was adopted back in 2005, but times have changed and this law has become outdated. Therefore, at the beginning of 2024, the Verkhovna Rada adopted a new version of the law, which will come into force on January 1, 2025.
One of the main reasons for such changes is the need to increase insurance amounts to the level of the EU countries and to update the system of payments in case of an accident.
The so-called "deductible" - the amount that a driver would have to compensate on his or her own in the event of an accident - will now be canceled.
What will change in the amount of insurance payments?
Today, the insurance company pays up to UAH 320 thousand for damage to health and up to UAH 160 thousand for car repairs. But from January 1, 2025, these amounts will increase. From now on, the maximum payment for property damage will be UAH 250 thousand per person (UAH 1.25 million per event), and for health damage - up to UAH 500 thousand per person (UAH 5 million per event).
This was done to take into account inflation and rising car repair prices.
For example, the new prices should cover the high costs of spare parts and service stations, as well as the increase in road accidents.
Starting in 2026, the amount of reimbursement will increase again, and when Ukraine joins the European Union, the amount of payments may be even higher.
How will the cost of policies change?
Most people are interested in how much a CTP policy will cost now. Previously, the cost of the policy was determined by the National Bank, taking into account certain coefficients, such as engine size or place of car registration. But starting in 2025, insurers will be able to determine policy prices on their own.
The cost will depend on several factors: the driver's place of residence, age, accident history, and even driving style. For drivers who often get into accidents, the cost can increase by 50-70%. This may mean that policies will go up by 2-2.5 times.
Nevertheless, certain categories of people, such as combatants, participants of the Revolution of Dignity and the disabled, will still receive a 50% discount.
Myths about the new car insurance rules
There are many rumors and myths surrounding the new rules. The NBU explains:
- Myth 1: Prices for a "motor citizen" policy will increase by 2-2.5 times. This is not entirely true. The price increase will depend on the driver's history. If you have a lot of accidents, the price may increase significantly, but for drivers with an accident-free history, the changes will be insignificant.
- Myth 2: Paper policies will become invalid. No, paper policies will remain in circulation until 2026, when the transition to electronic policies is planned.
- Myth 3: The new law will make it harder to sell policies. This is not true. The law only prohibits the sale of policies at below-market prices and increases requirements for insurance companies.
Direct settlement - what is it and how does it work?
The new law will introduce a direct settlement mechanism. Now, if you get into an accident and are not at fault, you can contact your insurance company instead of the insurer of the person responsible for the accident. This will greatly simplify the process of obtaining compensation, as previously it could take months.
What is the European Protocol?
If an accident involves two cars and no one is physically injured, you can draw up a Euro protocol. This is a simplified procedure for registering an accident when you do not need to call the police, and the drivers draw up a report on their own and send it to their insurance companies.
What about hull insurance?
Despite the expanded coverage of motor third party liability, the number of motor hull insurance policies issued will not decrease, according to experts.
It should be noted that CASCO is a voluntary car insurance that covers losses that may arise as a result of damage or loss of your car due to various circumstances, regardless of who is at fault. This is an additional insurance that is not mandatory, unlike CTPCI (motor third party liability insurance), but it provides more protection for the driver and his or her property. Market experts agree that no significant changes are expected. After all, voluntary motor hull insurance covers not only the cost of repairing a car after an accident, but also reimburses losses from various accidents, such as fire, tree fall, theft, and the consequences of military operations.
Summarize
The new car insurance rules in Ukraine will change the amount of payments and policy prices. Despite the possible rise in prices, many drivers will benefit from these changes: faster payments, more convenient procedures and discounts for beneficiaries.
Remember that the price of the policy will depend on your driving history, so you should take care of safe driving.
