European Commission: stronger insurance rules to protect victims of motor vehicle accidents
The European Commission has proposed to strengthen EU rules on motor insurance to better protect victims of motor vehicle accidents and improve the rights of insurance policyholders.
The EC's proposal will ensure that victims of motor vehicle accidents receive the full compensation they are due, even when the insurer is insolvent. The revamped rules will also ensure that those who have a previous claims history in another EU Member State are treated equally to domestic policyholders, and potentially benefit from better insurance conditions.
"With proposals, we are ensuring that victims of motor vehicle accidents will be better protected in the future. In addition, when people move across borders and purchase a motor insurance policy in another EU Member State, their claims history will be treated in the same way as those of domestic consumers. This is good news for those who move across the EU and for all of us as EU citizens”, said Valdis Dombrovskis, Vice-President responsible for Financial Stability, Financial Services and Capital Markets Union.
"The Motor Insurance Directive underpins the smooth functioning of the single market for motor insurance for the benefit of drivers and potential victims of motor vehicle accidents. We facilitate mobility across the EU through the portability of claims history. Furthermore, we improve access to compensation of victims of motor accidents in case of insolvency of an insurer and reinforce combat against uninsured driving", said Jyrki Katainen, Vice-President responsible for Jobs, Growth, Investment and Competitiveness.
The proposal to amend the Motor Insurance Directive will also make it easier for authorities to combat uninsured driving. It aligns the minimum levels of cover by motor insurance across the EU. Finally, it clarifies the scope of the Motor Insurance Directive following recent rulings of the Court of Justice of the European Union. The proposal is another follow up to the Commission's Consumer Financial Services Action Plan of March 2017.
The Commission proposes the following changes:
- Insolvency of an insurer: If the insurer of the vehicle responsible for an accident is insolvent, victims will be rapidly and fully compensated in their Member State of residence. In cross-border situations, this will ensure that the ultimate financial responsibility is borne by the insurance sector of the home Member State of the insurer, while allowing for quick compensation to victims.
- Claims history statements: Insurers will have to treat claims history statements issued by an insurer in a different Member State equally to those issued domestically. This should ensure that citizens purchasing insurance abroad can benefit from more advantageous insurance premiums, on the same level as domestic consumers.
- Uninsured driving: Member States' powers to combat uninsured driving will be reinforced. This should help to tackle uninsured driving which increases premiums for honest motorists.
- Minimum amounts of cover: EU citizens will benefit from the same level of minimum protection when travelling in the EU. The proposal sets out harmonised minimum protection levels for personal injury and material damage across the EU, as current minimum levels differ slightly between Member States.
- Scope: To enhance legal certainty, the proposal incorporates recent case-law of the Court of Justice of the European Union into the Directive. In particular, the rules now clarify that accidents caused during the normal use of a vehicle for the purpose of transportation, including its use on private properties, are covered.
In June 2016, the Commission launched work to evaluate the Motor Insurance Directive, involving a public consultation between July and October 2017. The amendments follow that evaluation.