Motor insurance: Council agrees position on better protection of victims of motor vehicles accidents

EU ambassadors today endorsed the Council’s position on rules to improve the rights of motor insurance policyholders.

The current rules applying to motor insurance enable EU residents to travel anywhere in the EU without the need to buy additional insurance. The motor insurance directive also ensures a high protection of potential victims of motor vehicle accidents.

The reform of the existing framework aims at making sure that victims of motor vehicle accidents receive quick and full compensation, where and when ever the accident occurs, including when the insurer is insolvent. The updated Directive, as agreed by EU ambassadors, would ensure appropriate compensation to all victims of accidents caused by the vehicles that are heavier than 25 kg or move faster than 25 km/h. This would mean a clear clarification of the current situation to the advantage of the victims.

To cope with insolvent insurers in the most efficient way, the Council’s position states that in cases of cross-border provision of insurance services, the compensation scheme in the victim’s member state of residency should initially pay the claim of the victim. It would then be reimbursed by the compensation scheme from the insolvent insurer’s home member state.

The proposed revision also reinforces the rules to tackle uninsured driving, harmonises minimum protection level of motor insurance’s covers for personal injury and material damage across the EU and adapts the scope of the directive, in line with recent ECJ case law. In particular, it specifies the definition of a “motor vehicle” and spells out that the directive should not apply to motorsport activities if those event are covered by an alternative compensation mechanism.

Next steps

The European Parliament voted on its position on this file in February 2019. Negotiations between the Council and the Parliament are therefore ready to start in the new year.