Motor insurance

Motor insurance is a form of obligatory liability insurance. It is not allowed to use vehicles without motor insurance in traffic. The insurance company (insurer) compensates the damage that the person responsible for the traffic accident causes to the injured party. Thus motor insurance lets you rest assured that the person who caused the traffic accident does not have to compensate for the damage themselves and that the damage will be compensated to the injured party. An insurer is obligated to compensate traffic loss to the insured party to the extent set out in the motor insurance contract and the Motor Insurance Act. In addition to motor insurance, you can also enter into a vehicle insurance contract (hull insurance), which insures your vehicle, for instance, against theft, vandalism, traffic accidents and natural disasters.

Entry into a motor insurance contract

The person who takes motor insurance for the vehicle does not have to be the owner of the vehicle. Anyone can enter into a motor insurance contract. The insurance for the vehicle registered in Estonia has to be entered into with an insurer who is a member of Estonian Traffic Insurance Fund. The insurer will issue you a policy to confirm the entry into contract. You have an obligation to pay insurance premiums. The insurer will also issue a Green Card to you upon your request. A Green Card is a special type of policy which shows that in addition to Estonia and the contracting states, the insurance cover is also valid in other countries indicated on the Green Card. The insurer will immediately forward the data on the contract entered into to the motor insurance register.

The obligation to enter into a motor insurance contract

It is not allowed to use vehicles without motor insurance in traffic. By way of exception, the vehicles in the possession of the Defence Forces, the Security Police Board, the Defence League and the Police and Border Guard Board do not need to have motor insurance while used in Estonia. A motor vehicle or its trailer registered in the motor register must have a valid motor insurance policy at all times with two exceptions:

  • insurance obligation does not apply within 12 months following the termination of the contract, provided that during the period the vehicle is not engaged in traffic or otherwise used in a manner that can cause an insured event; and
  • vintage vehicles and racing cars that are not used in traffic do not have to be insured.

If the insurance obligation is not met, compulsory insurance is applied to the vehicle, which is far more expensive than common insurance.

Compensation for damage

The insurer has the obligation to pay compensation, if the event qualifies as an insurance case according to the motor insurance contract. An insured event is the causing of damage to a third party, provided that all following conditions exist:

  • the damage has been caused by a vehicle that is subject to the insurance obligation;
  • the damage has been caused by the realisation of the risk characteristic of the operation of the vehicle in traffic and there is a causal link between the movement or location of the vehicle and the damage caused; and
  • the damage has been caused on the road or in another area used for conventional vehicle traffic.

In the event of an insurance case the insurer will compensate for the damage, such as:

  • the destruction of or the damage to the vehicle of the injured party;
  • the expenses related to the restoration or replacement of damaged buildings, fences, traffic signs or other things;
  • expenses related to the prevention or reduction of loss;
  • expenses incurred for the collection of compensation or for the identification of loss;
  • health care expenses of the injured party, including rehabilitation and medicines;
  • the decrease in income caused by the injured party’s incapacity for work;
  • the lapse of support to the dependents of the deceased;
  • the loss resulting from the increased needs of the injured party, for instance expense related with medical devices (spectacles, prosthesis, wheelchair, etc.), hiring a nurse and so on;
  • other additional expense arising from the insured event;
  • non-patrimonial damage; and
  • impairment of the value of the vehicle.

In addition to the above, the insurer will compensate for the treatment costs of the driver who caused an insured event in health care institutions.

Which damages are not compensated

Motor insurance does not cover the following:

  • damage exceeding the sum insured;
  • damage inflicted to the vehicle or another object by the impact of a stone or another object on the road;
  • loss arising from damage to or destruction of money, securities, works of art and precious metal objects, except personal necessities;
  • damage arising from the worsening of the quality of the environment, except reasonable expenses related to initial rescue operations for the purpose of eliminating initial damage and preventing further damage;
  • loss of income, except the loss of income due to the causing of death, health damage or a bodily injury to the extent provided for in the Motor Insurance Act;
  • the costs of using an object of equal value during the time in which the damaged object is being repaired or a new object is being acquired;
  • damage inflicted upon oneself;
  • damage caused to the owner of the vehicle driven by the possessor of the vehicle;
  • damage that does not constitute damage characteristic of damage caused by a vehicle as a major source of danger, except for damage caused to another vehicle by the door of a vehicle;
  • damage arising from the deterioration of further economic opportunities;
  • damage arising from a decrease of the value of the damaged object, except the exemption of the Motor Insurance Act on the impairment of the value of the vehicle; and
  • damage the prevention of which is not the purpose of following traffic rules, for instance damage arising from the fact that, due to the insured event, the injured party fails to perform a contract concluded with a person who was not involved in the insured event.

Dispute with insurance company As in other spheres of life, disputes are also common in insurance. In most cases, the parties of the insurance relationship settle their disputes by way of negotiations. If these fail, parties can refer the case to the motor insurance conciliator.

Motor insurance register

The motor insurance register is a database which includes information on:

  • all motor insurance covers (contracts and policies) issued by insurers operating in Estonia; and
  • all motor insurance losses adjusted by the insurers operating in Estonia.

All insurers operating in Estonia submit information to the motor insurance register.

Compiled by: Estonian Traffic Insurance Fund