Changes in Compulsory Liability Insurance: What’s Coming and Who Will Have to Pay

A series of changes to compulsory liability insurance are expected by the end of the year. Among other things, the minimum limits for damage coverage are set to increase, and mandatory insurance will also be introduced for faster electric scooters. Their owners will have to reach into their wallets. This is outlined in the amendment to the Act on Liability Insurance for the Operation of Vehicles, which members of Parliament are currently reviewing.

One of the changes is regarding who is responsible for insuring the vehicle. Now, it will no longer be the owner of the vehicle but the operator. However, this does not mean only the operator can arrange compulsory liability insurance. As before, any person who needs protection against the consequences of an insured event, known as an insurable interest, can also arrange insurance.

But what happens when people lend their vehicles to their children or use car-sharing services? “There is an agreement that a certain long-term aspect characterizes the position of the vehicle operator. Therefore, if the vehicle is rented or loaned for a short period, neither the tenant nor the borrower becomes the vehicle operator,” stated lawyer Kristýna Novákova from AK Rödl & Partner.

According to her, the children do not have to pay anything in such cases. An exception is when people give their car to their children as a gift. “In that case, they would become long-term operators with ownership rights,” she added.

Higher Tolls Will Increase the Price of Rolls or Milk

There will also be an increase in the minimum limits of insurance coverage in cases of damage to health, death, or property. In all cases, the limit will increase from the current 35 million crowns to 50 million crowns. “The increase is due to inflation and rising prices of materials and labor. Despite this, we recommend setting the limit to at least one hundred million crowns when taking out insurance. The price difference is insignificant in this case and can pay off,” says Adam Kaška from the financial advisory company FinGo.

Insurance for Fast Electric Scooters

The amendment also aims to expand the range of vehicles for which liability insurance is required. This will now include those vehicles with a maximum design speed exceeding 25 km/h or exceeding 14 km/h if the operational weight of the car is over 25 kilograms, as well as trailers. Motor vehicles are considered those where the engine is the primary source of propulsion. This mainly includes popular electric scooters and Segways.

“In the last five years, the number of accidents caused by scooters has increased tenfold, with the number caused by electric scooters more than doubling compared to regular scooters,” commented the Ministry of Finance in the explanatory memorandum for the amendment.

The number of damages caused by uninsured electric scooters is estimated to reach 210 to 430 cases per year. The amount of damages could reach up to 228 million crowns.

Greater Responsibility for Damages

The amendment also clarifies liability in cases where a driver, for example, leaves a non-functioning vehicle in a dangerous position and creates an obstacle. The damages will be paid from their insurance.

However, it still applies that in cases of gross violations of regulations, insurance companies will seek reimbursement of the paid amount from the drivers. “This includes driving under the influence of alcohol or drugs, driving a car without a technical inspection, or intentional damage,” lists Dušan Šídlo from Akademiepojištění.cz. Those who do not have a driver’s license, have a driving ban, or drive a vehicle without authorization, such as a company car without permission, will also have to pay from their own pockets.

According to Šídlo, the number of items for which insurance must be paid and the number of exceptions may increase. “A causal relationship between the occurrence of damage and violating the stated obligation conditions of the insurance claim. For example, having improper tires or an expired technical inspection will not be enough for the insurance company to refuse payment,” Šídlo wrote in Opojištění.cz magazine.

End of the Green Card

According to the proposal, people will no longer be required to carry a physical green card as proof of insurance in their wallets or car compartments. Police officers can use online records during inspections.