Since 1972, victims of vehicle accidents in Europe have been protected by EU motor insurance legislation. A series of directives, progressively strengthening this protection, culminated in the EU motor insurance directive in 2009. Following an evaluation of the legislation, the European Commission on 24 May 2018 put forward a proposal to strengthen these rules. The proposed changes should further protect victims of accidents and improve the rights of insurance policyholders. Here's a snapshot of what the changes are, and how they will benefit consumers.   

Insolvency

At the moment, victims can sometimes find that they are not adequately protected when there is an accident involving a driver whose insurer is insolvent.  With the changes the Commission is proposing, if this happens the victims will be quickly – and fully – compensated. They will initially be paid by a 'compensation body' in the Member State in which they live. In cross-border situations, it will then by reimbursed by a compensation body in the insurer's home country. This guarantees that the ultimate financial responsibility is borne by the insurance sector of the insolvent insurer's home country.

Uninsured driving

Uninsured driving is a growing problem in Europe. It cost the EU €870 million in claims only in 2011, according to the Association of European Vehicle and Driver Registration Authorities. And in general, it is honest policyholders who, through their insurers or national compensation funds, end up footing the bill. The proposal aims to reinforce the powers Member States have to combat the problem when it arises across borders. It does this by allowing them to conduct unobtrusive checks on the validity of insurance of vehicles registered in another Member State. This can be done not by introducing physical checks that require stopping the vehicle. Instead, it can be done using new, unobtrusive technological development such as number plate recognition technology.  Any such checks would have to be carried out in accordance with data protection rules.

Claims history

A claims history statement gives information about whether or not there have been any third-party liability claims against the policyholder in the last five years involving the vehicle covered by a contract, and the details of any claims. These statements are useful for helping providers avoid fraudulent insurance claims. And in many countries, insurance providers take them into account when determining a new premium for prospective policy holders. However, they are not always taken into account by insurers when the policy holder has moved from another Member State. This means these people may not get as good a premium as they should compared to local drivers. With the proposal, insurers will have to treat claims history statements issued in another EU country in the same way as those issued domestically. Also, to make it easier to verify these statements, the proposal sets out a harmonised format and content to be used across the EU.

Minimum amounts of cover

Current minimum levels of cover differ somewhat between Member States. The proposal ensures the same minimum protection for personal injury and material damage across the EU. The rules are designed to ensure that the minimum level is adapted every five years to both take into account economic changes and gradually remove differences between Member States. EU countries continue to be free to set, at national level, higher minimum levels of cover than those set out in the directive.

Scope of the directive

The basic scope of the directive remains unchanged. However, the proposal adds certain clarifications. It also incorporates recent rulings by the Court of Justice of the European Union, in particular the Vnuk ruling, which provided for a wide protection of victims of motor accidents.  There is also no change when it comes to how the directive is applied to other type of vehicles, such as autonomous vehicles, electric bikes, segways and electric scooters.  These are within the scope, but Member States have the right to exempt them from third-party liability insurance on the condition that victims remain protected and are compensated by national compensation funds.

Read more on the proposal