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Insurance payments in case of an accident: how much does the insurance company pay under CTP
According to Ukrainian law, a driver must have a motor third party liability insurance policy to be compensated for damage in an accident. Being involved in an accident is unpleasant in itself. It is usually followed by the hassle of receiving payments. Possession of information on this issue makes it possible to act competently, to receive legal compensation for damage with minimal nervous and time costs.
Calculation of losses under the CTP insurance policy
Compensation under a motor third party liability insurance policy is the money paid by the insurance company to victims of a road accident. This refers to accidents caused by drivers driving insured vehicles. According to Ukrainian law, payments are made up to 90 days after all documents are submitted to the insurer. Some companies compensate losses within 10-15 days, pending a court decision.
After an insured event occurs, which is exclusively a road traffic accident, the injured party files a claim with the insurance company, after which the car is inspected and the damage is analysed.
Factors affecting the amount of compensation:
- The number of affected cars. The total amount for property damage to all victims in one road accident is equal to five times the maximum limit (UAH 650,000 in 2020);
- the degree of wear and tear of the vehicles;
- the market value of the car;
- the degree of damage caused;
- the cost of repairs;
- costs of car evacuation.
Depreciation is accrued if the actual mileage of the car is twice the standard mileage, if the body parts have been restored, if the vehicle was used as a special purpose vehicle (e.g., a taxi).
Depreciation is allowed for vehicles manufactured in the CIS with a service life of more than 5 years, and for cars from other countries with a service life of more than seven years.
The amount of damage consists of the cost of repairs, painting of the car, paints and varnishes, and components to be replaced. The price of the parts is taken into account, taking into account their depreciation. When assessing repairs at a service station, the cost of new components and parts is taken into account, so the actual cost of restoring a car and the amount of damage calculated by the insurance company may differ significantly.
In such cases, the court orders the perpetrator of the accident to compensate for the damage, regardless of the initial level of wear and tear on the car's components and parts, after the injured party has carried out and paid for the repair work.
The damaged car should be repaired only after the calculation of compensation under the CMTPL policy. The assessment must be made within 10 days after the insured event.
If the accident caused damage to the life and health of people, the following settlement procedure applies:
- payments for treatment, transportation to a medical facility, and rehabilitation of the injured;
- compensation for the period of temporary disability, payment of lost income;
- 12-36 minimum expenses in case of long-term disability;
- 12 minimum expenses in case of death.
The loss is compensated no earlier than 15 days and no later than 3 months after the application for an insured event. Failure to receive money from the insurance company after 90 days is grounds for litigation.
Limits of payments under MTPL insurance
In accordance with legislative changes, in 2020, new insurance indemnity limits were established in Ukraine. The compensation for property damage to the injured party is UAH 130,000, and for damage to life and health - UAH 260,000.
In situations where an insured event is recorded by means of a European protocol, a separate maximum limit of UAH 50,000 is set. The Euro protocol can be used by mutual consent of the participating drivers who have MTPL policies. In this case, there must be no injuries in the accident, and the car owners must not show signs of drug or alcohol intoxication.
In case of serious accidents, the maximum limit is not enough to fully cover losses. Statistics show that this happens in four out of ten road accidents. In these cases, the culprit of the accident pays the difference from his or her own funds. Unexpected expenses can be avoided by entering into an additional agreement to the compulsory motor third party liability policy, which covers expenses in excess of the liability limit.
If there is no additional civil liability policy, the missing funds can be recovered by the voluntary consent of the culprit of the accident or through the courts if no agreement can be reached.
Peculiarities of calculating insurance indemnity in case of an accident under CMTPL
Damages are calculated using the methods of commodity expertise. The following formula is applied:
Damage = CP + CM + SS * (1 - FZ) + CTP, where
CP - the cost of repair and painting;
CM - the cost of materials for restoration;
CC - cost of parts and components of the car to be replaced;
FW - physical wear and tear coefficient;
MRO - marketable condition.
Value added tax is deducted from the accrued insurance indemnity. However, this part of the payment can be received additionally if the repair was carried out at a service station.
An examination to determine the amount of damage to the vehicle and the amount of compensation is carried out in the presence of the car owner. If he or she does not agree with the conclusions, he or she can organise an independent study.
The initial data for the calculation are the year of manufacture, make, and model of the car. The algorithms of the tool include the prices of spare parts for all makes and models of cars, the average market value of the standard hours of work of a service station specialist. The online calculator provides an approximate result.
What to do to receive payments from the insurance company
It is advisable to inform the representative of the insurance company about the occurrence of the insured event from the place of the accident no later than within three working days. The agent should be informed of your full name, insurance policy series and number, mobile phone number, and information about other parties to the accident. It is advisable to describe the visual damage to the vehicles and the circumstances of the accident. If there are no conditions for drawing up a European protocol, the police should be called to the scene of the accident.
Further instructions on how to settle the insured event are given by the IC representative. It is not recommended to compensate losses to third parties and their representatives without the insurer's written consent.
If the driver is found to be at fault, he or she informs the injured party that he or she is a motor third party liability policyholder and provides his or her insurance company's details.
To ensure payment of compensation for damage to the vehicle, the injured party submits a number of documents to the insurance company: a Euro protocol if the accident was not registered without police officers, a driver's licence, passport, copy of the MTPL policy, court decision, if available, and a claim for insurance indemnity.
Within ten working days from the date of the insured event, the damaged vehicle must be provided to the IC representative for inspection.
In order to receive payments for damage caused to life and health, the injured party shall provide documents confirming payment of treatment costs, a copy of a sick note, and an extract from an outpatient card.
In the event of the victim's death, a notarised death certificate and documents confirming the funeral expenses are required to receive compensation.
In some cases, compensation is paid by the MTIBU. The agency pays compensation if the insurance company of the culprit of the accident has gone bankrupt, if the culprit does not have a motor third party liability policy, or if the culprit belongs to privileged categories of citizens.
