Traffic insurance concerns us all – every driver, pedestrian and cyclist. Whether it’s a minor dent in the parking lot or a more serious accident on the highway, insurance is what helps cover the damage and ensures that the innocent party doesn’t have to face financial hardship as a result of the accident.
- The new revision of the Road Insurance Act that entered into force on July 2024 brought about several important changes that directly affect both vehicle owners and insurers. The goal of the law reform is clearer rules and a wider scope of insurance coverage, which make driving on the roads safer and more secure.
They rose with the new law traffic insurance benefit limits. This ensures that, in the event of large claims, victims have better opportunities than before to fully recover their costs. The management of insurance contracts has also become more user-friendly – the process of automatically renewing the insurance contract is now more strictly regulated so that policyholders are aware of all changes and their costs.
Wider scope of insurance coverage
One of the most important changes to the Motor Insurance Act is the increase in compensation limits, which ensures greater financial protection in the event of an accident. Due to the increase in the cost of living, the previous limits were no longer sufficient. Especially in cases where more than one vehicle was involved in the accident or several people were injured.
With the new law, the insurance sum limit for property damage compensation was raised from EUR 1,200,000 to EUR 1,300,000. This step helps ensure better financial protection for policyholders and victim(s) in case of larger claims. In the case of causing death, health damage and bodily injury, the new limit is 6,450,000 euros instead of the previous 5,600,000 euros.
Higher sums of insurance offer better protection to road accident victims and their families, even in cases involving serious accidents and/or multiple claims. Situations where one major compensation claim covers the entire limit of compensation for property or personal injury will be reduced, leaving other victims without compensation.
Clarification of green card requirements
The new law specifies the requirements for submitting a green card in Estonia. It is now allowed for a driver registered in a foreign country to submit a green card electronically in Estonia. A green card is a special type of international policy that confirms that the vehicle has valid traffic insurance outside the country of residence.[KL4]
Automatic renewal of the insurance contract
The law makes the automatic insurance contract renewal process more transparent and better regulated. Insurers must now inform the policyholder at least 14 days before the end of the contract of the next premium amount to be paid if the contract automatically extends. In this way, the policyholder has enough time to consider continuing the existing contract or choose another insurer if desired.
In addition, the law stipulates that the insurer may not only offer auto-renewing contracts. This gives the policyholder the opportunity to always review the terms of his insurance contract and, if necessary, terminate the contract, avoiding a situation where he would be tied to the insurer against his will.
Shortening the deadlines for handling claims
The new law sets clear time frames for insurers to process claims. Insurers are now obliged to complete the necessary actions within a reasonable time, but no later than within 30 calendar days after notification of the insured event. If the procedure is delayed, the insurer must inform the injured party, provide an explanation of the reasons for the delay, and indicate the expected deadline.
This change ensures faster and more transparent processing of damage claims and avoids situations where the victim of damage remains in the dark or the time for compensation is unreasonably long.
Automatic traffic insurance
The new version of the law also specifies the conditions under which automatic traffic insurance, or compulsory insurance, applies. If the vehicle registered in the traffic register remains uninsured, compulsory insurance is applied, the purpose of which is to provide automatic insurance coverage to the vehicle. This ensures that the vehicle participating in traffic will not remain uninsured even if the owner forgets to renew the insurance contract or fails to conclude it at all.
Automatic traffic insurance helps to avoid situations where the loss would not be compensated due to the lack of an insurance contract. It also motivates vehicle owners to monitor the validity of the motor insurance contract more carefully.
Clarification of the principles of incapacity for work and the payment of maintenance allowance
The new law specifies the principles for calculating and paying disability and maintenance benefits to ensure a fairer distribution of benefits. In case of permanent loss of working capacity, compensation is calculated based on the victim’s previous income taxed with social tax. Benefits now more accurately take into account the extent of reduced working capacity. These changes ensure that people who have become unable to work receive fairer compensation according to their condition, which takes into account their actual loss of work capacity and past earnings.
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2024-08-29 12:58:19
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