Yuriy Ostrovsky  

Insuring Your Car in Ukraine: How Not to Fall into a Cheap MTPL Trap

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Lately Motor (Transport) Insurance Bureau of Ukraine (MTIBU) has been trying to level prices for Motor Third Party Liability Insurance (MTPL) policies which are actually to be even in the market under current legislation. Sanctions imposed on insurers which offer unreasonable discounts vary significantly and range from fines to license withdrawals. In spite of this there are still a few players in the market who keep offering policies at a price up to 60 % lower than the standard one. If you are looking for cars for sale in Ukraine you should keep in mind that this kind of insurance is compulsory for all car owners.

To be fair, it’s worth mentioning that in Ukraine cars’ MTPL insurance is unprofitable for insurance companies including those which sell these policies without a discount and punctually pay the due indemnities.  It is the reason why you should give it a thought why an insurance company does offer you a discount. Sometimes a reliable insurer aimed at long-term co-operation is in need for current assets. In this case MTPL discount is the easiest way to reach this goal.  Such insurer is most likely to pay the indemnity due despite the red ink balance. Nevertheless in Ukraine cars’ liability insurance damping is a more frequent occurrence signaling the insurer’s attempt to avoid bankruptcy or deliberate collection of money before willfully exiting the market.  

It can take up to 3 years to declare an insurer bankrupt. Until then MTIBU is not liable to pay any indemnity.
A lot of buyers looking for cars for sale in Ukraine plan to purchase MTPL insurance at the lowest price counting on Motor (Transport) Insurance Bureau of Ukraine to fulfill the obligations of negligent insurers.  Some of them consider the indemnity issue to be that of the aggrieved party rather than their own. Legally this is true.  The process of being indemnified by MTIBU can be quite lengthy. It can take up to 3 years to declare an insurer bankrupt. Until then MTIBU is not liable to pay any indemnity. In this case you are the only one whom the aggrieved party can turn to. It’s up to you whether to save UAH 100-200 or to save your nerves. 

In Ukraine cars’ MTPL has the legally fixed limits of liability. They were set in 2010 at the level of UAH 50,000 for material damage and UAH 100,000 for bodily injuries. At the current exchange rate UAH 50,000 is equal to nearly € 2,000 which won’t cover even the expenses for bumper replacement if we are talking about certain car brands. The insured should be aware of the fact that the difference between the actual damage and the limit of liability under their MTPL insurance is to be covered from their own pockets. If you are looking at the cars for sale in Ukraine, you should also consider increasing the limit of your MTPL insurance voluntarily. This is the only way to secure the adequate coverage of expenses in case of the traffic accident. 

In this regard a few of the bonuses frequently offered by the insurance companies should be pointed out. They include free calling of the tow-truck, gas delivery or other options of roadside assistance. Such bonuses are mostly stipulated by the competition between the insurers obliged to keep the prices even. They are often offered by the reliable insurance companies which are not inclined to break the law by turning to discounts to attract clients.

Promising news for those looking for cars for sale in Ukraine is that of the possibility of direct settlement which has been lately actively discussed in the parliament. It all comes down to the right of the aggrieved party to be indemnified by the insurance company holding his MPTL policy rather than the one holding the guilty party’s policy. Such novelty, which has been widely used for some time in developed markets, would surely encourage Ukrainian car owners to choose reliable insurance companies for their MTPL insurance.


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