Minimum covers in European motor liability insurance
The market is currently in the midst of change. Two trends can be observed: unlimited covers are being discontinued in some countries, while, in line with EU directives, mandatory cover is being increased in those countries where it was formerly very low. This publication provides an overview of the mandatory and voluntary covers for motor liability insurance.
In extreme cases, a motor vehicle may cause damage that far exceeds the financial ability of its operator to pay for the loss he or she has caused. To ensure that such losses are indemnified, all but a very few of the countries in Europe and its neighbouring regions legally require vehicles operating on public roads to carry liability insurance. Thus, responsibility for indemnifying the damage caused by vehicles (and arranging for indemnification) has been transferred to the insurance industry. The cost is carried in common by the community of vehicle owners by means of premiums that they pay to the insurance companies.
These provisions for mandatory insurance differ from country to country. For this reason, there are considerable differences within Europe between the covers insured and the minimum statutory cover amounts that must be insured.
This paper provides a survey of the minimum motor liability covers currently mandated by European and other countries that participate in the Green Card system. In addition, it surveys the covers actually insured in practice – where this information is available.
