Compulsory third-party liability is not just an administrative formality, but a legal obligation that every owner of a motor vehicle must fulfil if they want to drive it on public roads. This type of insurance covers the damage you cause to other road users, and failure to take it out can lead to heavy fines, liability and litigation. What obligations does it entail, who must have it and when can the insurance lapse?
Imagine you’re driving down the road, enjoying a leisurely ride like Mr. Doctor from the legendary comedy My Fair Village. But suddenly you’re pulled over by the police. The first thing they ask for is your vehicle documents, which include a green card. If you don’t have a green card, you’re guaranteed a problem. The green card is given to you as proof that you have paid the statutory third party insurance. This is not just another annoying administrative obligation, but a legal necessity that protects all road users.
You may be one of those drivers who often ask whether they also have to take out legal car insurance if they already have breakdown cover. The answer is simple: yes, you must. This is because breakdown insurance covers damage to your own car, whereas statutory third party insurance, or third party liability insurance, covers damage you cause to others. If you don’t have it, you could end up with huge debts if you damage someone’s car or even cause them bodily harm.
The rules and obligations under the Motor Third Party Insurance Act are fixed and uncompromising. If you break this law, you can expect hefty fines, large financial compensation and in extreme cases, even lawsuits.
The main piece of legislation dealing with compulsory car insurance is the Motor Third Party Liability Insurance Act. It is commonly referred to as the Compulsory Insurance Act. It obliges all car owners to take out insurance, regulates its scope and the penalties for failure to do so. In addition to this law, drivers must follow other related regulations such as:
Anyone who owns a motor vehicle that is registered and operated on public roads must have valid legal car insurance. And, as we said, this obligation can be demonstrated by a so-called green card, which you present to police officers at the time of inspection.
Maybe you’ve received a letter saying you owe money on your liability insurance, maybe the bailiff has knocked on your door. In any case, you should know what your rights are and what the insurance company can actually demand from you. Take advantage of our legal advice and protect yourself from unwarranted interference with your rights.
If you are the owner or operator of a vehicle, then you must comply with several obligations imposed by the Motor Third Party Insurance Act. Specifically, you must:
Although most vehicles you wish to drive on the road must have third party insurance, there are some exceptions where you do not need to take out third party insurance.
The first exception is cars that are registered as historic and the driver does not regularly drive them on public roads. Historic vehicles are usually registered on the Historic Vehicle Register and may only be driven on special occasions. You can recognise them by the special registration plate for historic vehicles. However, if the owner of a historic car wanted to drive it in regular traffic, he or she would have to take out compulsory insurance for it as for a regular car.
The second exception is vehicles of the armed forces. Vehicles such as tanks, military vehicles, armoured personnel carriers and some special police and fire brigade vehicles have a special insurance regime. Damages to these are usually covered by the state budget or other special liability insurance.
A third exception is vehicles removed from the road vehicle register. This applies to both permanently scrapped cars (e.g. after ecological disposal) and temporarily scrapped cars (cars in so-called deposit). However, as soon as you want to cancel the temporary withdrawal and put the car back on the register, you have to start paying the compulsory liability insurance.
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Statutory car insurance is not something you take out and is valid once and for all. There are situations when statutory car insurance can lapse or when changes need to be made to the policy.
The moment you no longer plan to drive your vehicle, you have the option to officially remove it from the vehicle register. Once a car is scrapped, the obligation to have insurance on it ends. The scrapping can be done temporarily, so you can have the registration plates deposited at the office. You are then not obliged to pay statutory car insurance during the period of scrapping. However, if you use the car illegally on the road, you will face severe penalties. The insurance does not automatically lapse in this case, but you must cancel it yourself with the insurance company.
The other option is permanent scrapping, where you never want to use your car again and take it to an environmentally friendly disposal site. Once the car is permanently removed from the register, the legal car insurance automatically ends. If you have paid premiums for a longer period of time in advance, you may be entitled to a pro-rata refund. The specific terms and conditions vary depending on the insurer.
If you are not happy with your insurer, you can cancel your compulsory third party insurance contract and switch to another insurer. To do this, you must give written notice, usually at least six weeks before the end of the insurance period. Some insurers also offer better rates for new clients, so it pays to compare quotes regularly. However, there must never be a gap between your original and new policy where you drive your car without insurance.
Legal car insurance is an essential element of safety and financial protection for all drivers. If you choose to ignore the obligation to pay your compulsory insurance, you run the risk of receiving a hefty fine, but much worse are the consequences in the form of lawsuits and serious financial problems if you cause an accident and have to compensate the other driver. We therefore recommend that you always keep your insurance in good order and check it regularly.
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Statutory motor insurance, known as compulsory liability insurance, is an essential part of owning and operating a motor vehicle on public roads. This insurance is not optional – it is required by law to be taken out and is designed to cover damage caused by the driver to other road users. Although breakdown insurance protects your own vehicle, it is not a substitute for compulsory liability insurance. Proof of having taken out this insurance is a green card, which must be carried at the check. If a driver fails to take out compulsory third party insurance, he or she may face heavy fines, liability for damages and, in extreme cases, legal proceedings. The rules are laid down in the Motor Third Party Liability Insurance Act, together with the Civil Code and other related regulations. The insurance obligation applies to all registered vehicles, with the exception of historic cars, vehicles of the armed forces and those temporarily or permanently removed from the register. The insurance may lapse, for example, when the vehicle is permanently scrapped or when the insurance company is changed, and there must be no gap between the contracts when the vehicle is transferred to another insurance company. Failure to comply with these obligations can have serious legal and financial consequences for the driver. It is therefore important to always keep your insurance in order and deal with any changes in a timely manner to avoid unnecessary complications.
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