Damages subject to indemnification

The motor third-party liability (MTPL) insurer indemnifies the victim for the damage caused in an insured event on behalf of the person who caused the damage. The general bases for indemnification for damage are stipulated in the Law of Obligations Act, and the obligations of the insurer are specified in the Motor Insurance Act.

An MTPL insured event means causing damage to a third party if all of the above circumstances are present:

• the damage was caused with a vehicle that must be insured

For example, damage caused by an electric bicycle, where the motor only assists pedalling, is not considered an MTPL insured event. Similarly, damage caused by an electric scooter with a maximum speed not exceeding 25 km/h and a mass not exceeding 25 kg is not considered an MTPL insured event.

• the damage has been caused upon using a vehicle as a means of transport

For example, the following are not deemed to be MTPL insured events:
-a crane truck is in working position (the truck’s wheels lifted from the ground and it stands on supports) and the panel hoisted with the crane becomes unfastened and falls on a passing car
-a ladder placed against a standing vehicle falls on the car next to it because goods are being loaded into the vehicle

MTPL applies to any use of a vehicle as a means of transport, regardless of the terrain or whether the vehicle is stationary or moving.

Irrespective of the above, the following are not deemed to be insured events if the damage is caused upon using a vehicle for purposes other than as a means of transport, including:

• as a means of committing an act of terrorism
• as sports equipment during a competition, training session, course of instruction or similar event, where the road or area on which the vehicle is used is closed to pedestrians, spectators and other vehicles
• as work equipment where the risk inherent in its use as work equipment has materialised

An event in the case of which the insurer is not required to indemnify the damage because it is precluded in the Motor Insurance Act is not deemed to be an insured event.

For example, in the case of a contract of carriage other than a contract for the carriage of passengers, damage caused by 
damage to or loss of cargo carried by the carrier who caused the insured event is not covered.

For example, an MTPL insurer will indemnify:

• the destruction and damage of the victim’s vehicle;
• the restoration or replacement of a damaged building, fence, traffic sign or other thing;
• the costs incurred to prevent or reduce damage;
• the costs incurred to obtain the indemnity or determine the damage if getting the indemnity without incurring such costs would have been impossible;
• the medical expenses of the victim, incl. nursing care and cost of medicines;
• the decrease in income caused by the victim’s incapacity for work;
• the loss of maintenance support by a person dependent on the victim who was killed;
• the damage caused by an increase in the needs of the victim, such as the expenses of medical aids (glasses, prostheses, wheelchair, etc.), carers, etc.
• non-material damage;

For example, the insurer indemnified non-material damage if a person sustained a serious bodily injury as a result of an insured event.

• decrease in the value of the vehicle

In addition to the above, the insurer indemnifies for the cost of treatment of the driver who caused the insured event in a medical establishment.

Irrespective of the above, the insurer will not indemnify the following:

• damage that exceeds the sum insured;
• damage caused by the deterioration of the quality of the environment, except for the reasonable costs associated with primary rescue operations for the elimination of primary damage and preventing the damage from increasing;
• loss of income, except for income lost due to causing death, damage to health or a bodily injury to the extent set out in the Motor Insurance Act;
• damage caused to oneself;
• material damage caused to the owner of the vehicle driven by the possessor of the vehicle;

For example, the insurer will not indemnify the owner of the vehicle for the damage caused by the owner’s friend driving the car into a ditch, thereby damaging the vehicle.
The driver is the possessor of both the car and the trailer connected to it. For example, if the driver of a car with a trailer hits a tree while manoeuvring, the MTPL insurer will not cover the cost of repairing the trailer. Similarly, damage that occurs if a trailer becomes detached from the car pulling it while the car is in motion and then the car pulling the trailer subsequently collides with the detached trailer is not covered by the MTPL insurance contract.

• damage the prevention of which is not the objective of compliance with traffic rules. For example, damage caused by the fact that as a result of the insured event the person who suffered the damage is unable to perform a contract entered into with a person who was not involved in the insured event.

The objective of compliance with traffic rules is to guarantee traffic that is undisturbed, fluent, as fast as possible, safe and causes minimal damage to the environment. In this context, protecting the health of people and preventing damage to property must be considered the objective of compliance with traffic rules.
For example, the insurer will not indemnify damage sustained by a transport company involved in the accident due to the fact that the cargo is late as a result of the insured event and the transport company must pay the recipient of the cargo a fine because of the delay.

Only the damage caused by the insured event is indemnified, e.g. the repair of the damage sustained by the item before the event will not be indemnified.
The insurer may reduce the indemnity considering the role of the person who suffered the damage in the occurrence of the damage or impact on the amount of the damage.

For example, when the driver breaches traffic rules and therefore causes an MTPL insured event, then the insurer of the other vehicle reduces the indemnity to the person who caused the damage to zero.

For example, an insurer may reduce the indemnity if:
-the passenger does not fasten the seatbelt and as a result, sustains more injuries than they would have sustained if the seatbelt had been fastened
-a bus passenger is injured because they did not hold on to the pipe and fell over when the bus braked

Neither the person who caused the damage nor the MTPL insurer can be required to indemnify for purely economic damage. In the case of causing motor damage, purely economic loss is:

• injury to a thing not specified in § 132 of the Law of Obligations Act

In general, only damage caused to a thing is subject to indemnification, except for the damage specified in subsection 4 of § 132 of the Law of Obligations Act. Other damage resulting from the fact that the thing has been damaged or destroyed is purely economic damage and is not subject to indemnification.

• personal injury not specified in §§ 129 to 131 of the Law of Obligations Act

For example, neither the person who caused the damage nor the insurer can be required to pay any indemnity if due to an MTPL insured event:
-the injured person misses out on a trip or a visit to the theatre or to the cinema
-the injured person bears pointless costs, such as having to pay a lease payment while not being able to use the vehicle.