EC starts proceedings to amend the Motor Insurance Directive; better protection of accident victims and combating uninsured driving among main goals

29 May 2018 — Daniela GHETU
The European Commission (EC) has taken steps to strengthen EU rules on motor insurance to better protect victims of motor vehicle accidents and improve the rights of insurance policyholders by amending the current Directive on motor insurance.

The amendments proposed on 24 May by the EC will ensure, in the European executive body's view, 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."

Another goal that proposal to amend the Motor Insurance Directive is targeting is to help authorities combating uninsured driving. It also aligns the minimum levels of cover by motor insurance across the EU and it clarifies the scope of the Motor Insurance Directive following recent rulings of the Court of Justice of the European Union.

Changes proposed by the EC to the current EU motor insurance rules:

  • 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 harmonized 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.
Valdis DOMBROVSKIS, Vice-President responsible for Financial Stability, Financial Services and Capital Markets Union said: "With today's proposals, we are ensuring that victims of motor vehicle accidents will be better protected in 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."

The first EU Directive on motor insurance was adopted in 1972, with the objectives of protecting victims of motor vehicle accidents and facilitating the free movement of motor vehicles between Member States. Subsequently, five motor insurance Directives progressively strengthened the protection of EU citizens. In 2009 those were consolidated into one EU Motor Insurance Directive (Directive 2009/103/EC).

In June 2016, the Commission launched work to evaluate the Motor Insurance Directive, involving a public consultation between July and October 2017. The amendments presented today follow that evaluation.