Starting January 1, a new law regarding "auto liability insurance" takes effect: exploring the changes and debunking myths.

Starting January 1, a new law on "auto insurance" comes into effect: changes and myths

As of January 1, 2025, a new law on mandatory civil liability insurance for vehicle owners will take effect. Currently, there are many rumors and myths circulating about these changes.

This is reported by 24 Kanal referencing NBU. In reality, the new law grants insurers more flexibility in determining policy costs, which will depend on the individual driver's history.

Myth one: starting this year, auto insurance policies will immediately increase in price by 2 to 2.5 times

Price increases will mainly affect drivers with a negative accident history or those who are at a higher risk of being involved in accidents (for example, young drivers or residents of large cities). Estimates suggest a possible increase of around 25 to 30%.

Importantly, the new prices will only apply to new policies, while existing policies will remain valid. Additionally, certain categories may receive a policy with a 50% discount.

Myth two: starting this year, paper policies will become invalid

It’s not quite that simple. The transition to electronic policies will be gradual. A full transition to electronic policies is expected only by January 1, 2026, when they must be entered into the centralized database of the MTSBU.

This will help reduce instances of fraud and establish the practice of electronic handling of insurance documents.

Myth three: the new law will significantly complicate the sale of policies

In fact, the aim of the new regulations is to eliminate the semi-legal trading of policies at undervalued prices, which has distorted competition for many years. However, according to the NBU, most companies are ready to meet the new requirements and increase their client base, pushing out dishonest players.

The new law is intended to make auto insurance a more effective tool for risk coverage for car owners.

Main innovations:

• The abolition of the depreciation coefficient and the introduction of the principle that insurance compensation must restore the vehicle to the condition it was in before the accident.
• The introduction of direct damage settlement for the affected vehicle, with the option to turn to their own insurer.

• A mandatory timeframe for making decisions on insurance payouts - 90 days, with penalties for violations of this timeframe.
• The removal of the cap on the maximum compensation amount under the European Protocol.
• The MTSBU will make payments instead of the insurer in the event of license cancellation.

Furthermore, the new law brings the Ukrainian insurance market closer to European standards, providing for a gradual increase in insurance payout limits to EU levels.

Starting January 1, 2025, the limit for personal injury will increase to 500,000 UAH, while the limit for property damage will rise to 250,000 UAH.

An accident involving a bus occurred in Kharkiv: many injured