UKRAINE: MTIBU: The new law "On MTPL" will change the principles of compensation payment to owners of used vehicles

6 December 2021 — Marina MAGNAVAL
General Director of MTIBU (Motor Transport Bureau of Ukraine) Volodymyr SHEVCHENKO speaking about a new edition of the law of Ukraine "On compulsory insurance of civil liability of owners of land vehicles", noted that the new law will change the principles of compensation for owners of used cars.

"The current law, adopted in 2004, was based on European practices, however, it contains norms that cause reasonable criticism from people who suffered from road accidents. One of the main points is about payments considering wear and tear for spare parts to be replaced during repair. Therefore, in the new law, we remove the concept of wear and tear and move on to the concept of "bringing a damaged car to the state in which it was before the accident," he explained.

Market experts note that in European countries, 93-96% of payments are made directly to service stations to compensate costs of repair, and not in the form of money to victims of accidents. Cash payments are made only in certain cases, when, for example, restoring a car after an accident is economically inexpedient.

Avoiding the need to calculate wear and tear is one of the advantages of the new concept, since non-original (licensed) spare parts or used parts can be used for repairs, when these parts do not affect safety of further vehicle operation. According to the EU Directive on technical inspection, components and assemblies of a car repaired after an accident will be checked for operational safety and appropriate technical condition. In addition, compensation payment to service stations and subsequent repair of vehicles will help prevent possible dissatisfaction and conflicts related to calculation of amounts of material damage.

"In Ukraine, average age of the vehicle fleet, according to various estimates, ranges from 19 to 24 years. Now, according to the current legislation, most victims of road accidents receive payments with deduction of depreciation for spare parts in 50-70%, this is unfair and does not correspond to European practices. Solving this problem at the legislative level will significantly improve protection of interests of victims of road accidents and trust in insurance", stressed Volodymyr SHEVCHENKO.

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