What is covered by compulsory statutory motor insurance, and must everyone have it?
You probably know that motor vehicle owners are obliged to take out statutory insurance. But do you also know what this insurance covers? Read this article.
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If you are the owner of a motor vehicle, you are legally obliged to take out compulsory third-party motor insurance. This obligation arises when you put your motor vehicle into service. This insurance is compulsory for every motor vehicle for which a vehicle registration certificate, technical certificate, or similar license has been issued.
All vehicles with a registration number, as well as special vehicles that do not have a registration number but are driven on our roads, are obliged to take out compulsory insurance.
What is statutory motor insurance?
Statutory car insurance, or compulsory third-party insurance, is actually motor third-party liability insurance. This insurance protects the driver who is using the vehicle at the time of an accident or claim and is therefore liable for any damage caused by its operation. Liability insurance covers anyone who is liable for damage caused by the operation of the motor vehicle specified in the insurance policy.
By taking out compulsory third-party insurance, you transfer financial responsibility for the financial settlement of the damage caused to the insurance company with which you have concluded the contract. However, this insurance does not cover damage you cause to your car through your own fault. Collision insurance is designed to cover such damage.
Who has to pay compulsory insurance?
Compulsory motor insurance must be taken out by:
- every holder of a motor vehicle after it has been acquired
- any owner or operator of a motor vehicle
- the driver of the vehicle, if the vehicle is from another country
- the lessee of the vehicle if the vehicle is subject to a lease contract with a right to purchase the leased item, so-called leasing
This must be done at the latest on the first day of use of the vehicle. The commencement date of statutory motor insurance is the date the policy is taken out. If you happen to own a car and drive it without having taken out compulsory insurance, you are taking a big risk. You could be prosecuted for breaking the law and face a fine.
What is covered by compulsory insurance?
Statutory insurance covers your liability for:
- bodily injury
- death costs
- damage to, destruction, theft, or loss of property
- legal representation costs for claims
- loss of profit
- the cost of medical care, sickness benefits, sickness insurance benefits, accident benefits, accident insurance benefits, pension benefits, retirement benefits, and old-age pensions, if the insured person is obliged to reimburse them.
The law stipulates that the amount of basic claims coverage is the same for all insurers. However, prices may vary because insurers may also provide various extra services and products, such as add-on insurance, for each of their products.
What is not legally covered by compulsory insurance?
The insurer will not indemnify the insured for a loss if it is a liability claim:
- sustained by the driver of the motor vehicle by the operation of which the damage was caused,
- for which the insured is liable to his/her spouse or to persons living in the household with him/her at the time of the occurrence of the damage,
- incurred by the holder, owner, or operator of the motor vehicle by the operation of which the damage was caused,
- damage to the vehicles of a combination consisting of a motor vehicle and a trailer, except where the damage is caused by the operation of another motor vehicle or where the motor vehicles are connected by a towing rope or towing bar in the course of rendering assistance which is not carried out in the course of a business activity,
- to the motor vehicle by the operation of which the damage was caused, as well as to the goods transported by that motor vehicle, except for damage caused to goods which the persons being transported had on or about their person at the time when the accident occurred,
- which the assured has paid or has undertaken to pay in excess of the limits laid down by special regulations or in excess of a final decision of a court on compensation for damages, or on the basis of a decision of a court approving an agreement between the parties to the proceedings if the insurer was not one of those parties,
- damage caused to competitors or competitors in motor races and competitions or in preparation for them, or damage to motor vehicles used in them, except damage caused by the operation of such a vehicle in which the driver is obliged to observe the rules of the road,
- incurred in the reimbursement of the cost of medical care, sickness benefits, sickness insurance benefits, accident benefits, accident insurance benefits, pension benefits, retirement benefits, and old-age pensions provided on account of personal injury or death caused by the use of a motor vehicle,
- if the person responsible for the damage has not been identified,
- to the driver of the motor vehicle by the operation of which the damage was caused,
- caused by the working activity of a motor vehicle as a working machine, except for damage caused by its driving,
- the occurrence of which is not causally connected with the insured event,
- caused by the handling of a load of a stationary vehicle,
- arising from the operation of a motor vehicle during an act of terrorism or an event of war, if such operation is directly related to that act or event.
- Unless otherwise provided in the insurance contract, the insurer shall be entitled to refuse partial or total indemnity if the insured
- without the consent of the insurer, accepts an obligation to compensate for the loss or any part thereof in excess of the insurance benefit which the insurer would otherwise have been obliged to provide under the law,
- undertakes to pay a claim which is time-barred,
- fails to provide the insurer with the necessary assistance in legal proceedings.