Will insurance prices rise? New regulations for "auto liability" and "Green Card" effective January 1st.

Will insurance prices rise? New rules for "auto liability" and the "Green Card" effective January 1

A new law on car owner liability insurance has come into effect in Ukraine. As a result, an increase in the prices of OSAGO ("auto liability") policies is anticipated, along with other changes in auto insurance regulations.

RBC-Ukraine reports on what will change starting January 1.

New conditions for "auto liability" in 2025

For owners of OSAGO policies, there will be no changes. This means that insurance issued before January 1, 2025, will remain valid under the previous conditions for the duration of its term.

Conditions will change for those who purchase insurance this year. In particular, insurance payouts will increase. From 160,000 to 250,000 hryvnias for car repairs, and from 320,000 to 500,000 hryvnias for medical treatment of victims in traffic accidents.

As the regulation of prices for "auto liability" is being abolished, a price increase is expected. The deductible is being eliminated (the portion of costs not covered by insurance) in all contracts.

The option to not obtain OSAGO for certain beneficiaries - such as combatants, individuals with disabilities, etc. - is being abolished. These categories will now need to purchase a policy, but they will receive a 50% discount.

Mandatory direct loss settlement by insurance companies will be introduced. In the event of an accident, the driver will be able to contact their own insurance company rather than the at-fault party, significantly simplifying the claims process.

Full restoration - compensation will be calculated without accounting for depreciation, ensuring the vehicle is returned to its pre-accident condition. Insurance companies will organize repairs at authorized service centers, relieving drivers of the need to manage these issues themselves.

Furthermore, it is planned to implement monitoring of policy availability through speed control camera systems in 2025. This means that cameras will capture license plates, and the system will automatically check for the existence of "auto liability." If a vehicle is uninsured, a fine will be issued.

How much will mandatory OSAGO insurance increase?

At this time, it is not clear, as each insurance company will apply its own approach. However, it is possible that insurance costs could rise by 100% or more.

For instance, the tariff grid of the VUSO company for Kyiv is presented on the hotline.finance service. If in 2024, a policy for a passenger car with an internal combustion engine of up to 1600 cm3 cost 3200 hryvnias, it will rise to 6400 hryvnias in 2025.

Insurance for a motorcycle or scooter with an internal combustion engine of up to 300 cm3 cost 1088 hryvnias last year, and now it will cost 2176 hryvnias. Tariffs from other insurers are expected to be updated soon.

Transition period: what happens in the event of an accident involving vehicles with different policies

Throughout the year, drivers in Ukraine will be using both old and new policies, which may lead to confusion about how "auto liability" will operate in the event of an accident.

If the at-fault party has an old policy and the victim has a new one

The victim will contact their insurance company, which operates under the new law. Compensation will be calculated with depreciation taken into account, but the actual payout may be lower than stipulated in the terms because compensation is based on the at-fault party's contract.

Payout limits: up to 160,000 hryvnias for the vehicle, up to 320,000 hryvnias for medical treatment.

If the at-fault party has a new policy and the victim has an old one

In this case, the involvement of insurance companies in the direct loss settlement agreement plays a crucial role. The victim will file a claim with their own insurer. If not, they will contact the at-fault party's insurance company.

Depreciation of the vehicle is not considered in compensation calculations. Payout limits: up to 250,000 hryvnias for the vehicle, up to 500,000 hryvnias for medical treatment.

If both parties have new policies

The victim will approach their own insurance company for compensation. Subsequently, the victim's insurer will settle with the at-fault party's insurer through subrogation. Compensation will be calculated without accounting for depreciation. A precise evaluation of the cost of repairs or restoration of the vehicle will be provided.

Payout limits: up to 250,000 hryvnias for the vehicle, up to 500,000 hryvnias for medical treatment.

If both parties have old policies

Two options for settlement are possible depending on the involvement of insurance companies in the Direct Settlement Agreement. If the insurers are participants in the direct settlement agreement, the victim will contact their own insurance company for compensation. If not, they will contact the at-fault party's insurer.

Depreciation of the vehicle is taken into account in compensation calculations. Payout limits: up to 160,000 hryvnias for the vehicle, up to 320,000 hryvnias for medical treatment.

What has changed for the "Green Card"

The "Green Card" is a mandatory insurance policy that allows for travel in participating countries. For Ukrainian drivers, this means outside of Ukraine. In the event of an accident, the "Green Card" guarantees compensation for damages to victims based on the laws of the country where the accident occurred.

Starting January 1, 2025, when crossing the border, there is no need to print paper copies of the "Green Card." It is permitted to carry an electronic document in PDF format and confirm the presence of insurance from a smartphone screen.

This applies not only to checks by Ukrainian border guards but also to inspections abroad. All countries participating in the Green Card system are required to accept both paper and electronic certificates. Additionally, those entering Ukraine in a vehicle with foreign registration can present their insurance electronically.

The process for settling accidents under the "Green Card" remains unchanged.

An important update. The "Green Card" now becomes effective at 00:00 on the date specified in the contract as the start date, but only after the record of this contract is entered into the Unified Centralized Database.

Therefore, such insurance should be arranged at least one day before the planned departure.

If there is no valid certificate, the driver may be denied entry at the border. All policies issued before January 1, 2025, will remain valid until their expiration date.

Fines for the absence of an insurance certificate in several countries range from 150 to 1000 euros. An increase in the cost of the "Green Card" is also expected due to the abolition of price regulation.