The new compulsory insurance law could bring a significant financial burden

The new mandatory car insurance law

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Despite this positive change, some may perceive the new law negatively. The law anticipates an expansion of areas for which insurance will be required. At the same time, it creates opportunities for further exceptions, which will allow insurance companies to reduce their claim settlement costs.

An important aspect of the new mandatory car insurance law is the provision contained in Section 32, Paragraph 2, which reads as follows:

The insurer has the right to recover from the insured what it paid on their behalf if it proves that the insured caused damage by operating or using a vehicle,

a) which, by its design or technical condition, does not meet the safety requirements for road traffic, operating personnel, transported persons, or goods, or

b) whose technical roadworthiness has not been approved.

Similar text can be found in the current law, but it is supplemented by a sentence that reads:

„and this violation was in a causal relationship with the occurrence of the damage, for which the insured is liable.“

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Insurers' claims are now contingent on a causal link between the occurrence of damage and the breach of duty. Unsuitable tires or an expired technical inspection (MOT) are not, by themselves, grounds for the insurer to refuse a claim. However the new law no longer requires a direct causal link between the damage incurred and the vehicle's technical condition or its approval for operation. Unlike current practice, your insurance company will not automatically cover you and will be able to claim costs for damages you caused with a vehicle that has faulty lighting, a damaged or cracked windshield, damaged bodywork, poor-quality tires, or if the vehicle does not meet MOT technical standards, regardless of whether these deficiencies contributed to the damage or not.

The new law introduces not only fines and other criminal sanctions but also the threat of a financial burden amounting to hundreds of thousands or even millions of Czech crowns, especially in cases where damage is caused to expensive vehicles or harm to human health.

The new compulsory insurance law changes the conditions for claiming insurance benefits, particularly regarding the causal link between the damage incurred and the breach of obligations related to the vehicle's technical condition. This places greater emphasis on compliance with regulations concerning the vehicle's technical condition and other aspects that may affect the claim for insurance benefits.

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The Ministry and legislators have sought to strike a balance between consumer protection and the interests of insurance companies. Changes in how causality is understood can have various consequences for drivers and insurers. It is crucial for drivers to be well-informed about the new rules and to strive to comply with regulations concerning their vehicle's technical condition and other obligations. This should help minimize the risk of financial burdens associated with the new compulsory insurance law.

When arranging insurance, it is important to carefully review the terms and exclusions, which may affect the claim for insurance benefits. Changes in the compulsory insurance law may lead to a greater emphasis on specific conditions within insurance contracts and exclusion clauses. The law grants insurers a certain flexibility in deciding on claims, which can result in varying approaches among companies. Consumers should choose insurers with clear and fair terms that will allow them to receive benefits if they fulfill their obligations. It is important to consider an insurer's reputation and trustworthiness when making a choice.

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When entering into an insurance contract, it's also advisable to consult with Eurovalley so that individual needs and risksare taken into account. Do not hesitate to contact us.

The best insurance, or nothing at all.

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