In accordance with current Ukrainian legislation motor third party liability insurance has been compulsory for all car owners for several years now. However the penalties for not having MTPL insurance policy in your vehicle have been imposed only recently. Let’s see what aspects should be kept in mind when purchasing this kind of insurance.
Tip # 1
To begin with, it must be pointed out that nowadays there is only one type of MTPL insurance policy which covers one vehicle irrespective of the number of drivers having access to it. The only requirement for a person driving the vehicle is to have the necessary driver’s license. Earlier this type of policy was called “I type policy”. It allowed saving money by purchasing it for one or two drivers using the car leaving the other persons having access to it without insurance coverage. This innovation also entails additional expenses for several vehicles’ owners.
Tip # 2
Insurer’s reliability and presence of your policy in the register of MTIBU (Motor Transport Insurance Bureau of Ukraine) are also important in this regard. It’s no secret that there are a lot of fly-by-night insurers who sell cheap policies without putting them on the necessary register despite the fact that they bear criminal responsibility for it.
After paying for MTPL policy remember to ask for the receipt and request to see the license for this kind of insurance. Ideally – transfer and acceptance act confirming the origin of the MTPL policy forms. Under current legislation of Ukraine insurance company is liable to put the requisites of the MTPL policy on the registry of MTIBU displayed on their website
Tip # 3
The limits of liability were approved in 2012. They amount to UAH 50,000 and UAH 100,000 for physical damage and bodily injuries respectively. Considering the drastic depreciation of UAH during last 18 months it is obvious that the indemnity won’t cover in full the repair expenses as the lion’s share of car parts are imported and are exchange-rate sensitive. From our experience we can conclude that the price for car parts doubled, and for some – even tripled, while the price for maintenance services increased by 20 – 50 %. This supports the idea that it is essential that these limits be reconsidered.
Another important aspect that calls for changes is the indemnity procedure under MTPL insurance. Currently motor third-party liability insurance covers only physical damage, but not the actual repair expenses.
They may seem to be the same thing. However, the main difference lies in the following. Indemnity for physical damage is always adjusted for depreciation of the spare parts. For example, the depreciation ratio of the vehicle produced in 2007 equals 45 %. Imagine that the cost of the repair accounted for UAH 20,000 for the spare parts and UAH 5,000 for the repair itself. The sum paid for the material damage will amount to only UAH 13,750 instead of UAH 25,000. The aggrieved party is entitled to receive the difference paid by the driver at fault either voluntarily or through legal action. The whole thing will require much time as well as nerves. This collision, however, can be eliminated through introducing amendments to Civil Code of Ukraine.
Currently motor third party liability insurance covers only physical damage, but not the actual repair expenses.
Summing it up - it all comes down to increasing the limits of liability in accordance with Ukrainian legislation and changing the approach to calculating the sum of indemnity.
It’s worth mentioning that not all issues associated with MTPL insurance have been revealed in this article. However it is crucial to decide whether you want to save a couple of hundreds only to encounter bigger expenses in the future, or you would rather purchase a policy from the reputable insurer.
