Compulsory third party insurance: every driver should know this

Without compulsory liability insurance, you can’t get on the road. If you are stopped by the police and found not to have paid your third party insurance, you could face a hefty fine. Not to mention what would happen if you caused an accident without compulsory insurance. Let’s take a look at exactly what third party insurance covers, how you can take it out and what penalties you face for not paying.

What is compulsory third party insurance and why must every car owner have it?

Imagine you’re driving through town and accidentally fail to brake at a traffic light. Boom and you’ve already crashed the expensive SUV in front of you. Hundreds of thousands in damage, plus the driver of the other car complaining of neck pain and threatening to get a lawyer. Liability insurance is just the thing to save you in this situation – if you have it, the insurance company pays the damages, not you. However, if you’re driving without compulsory liability insurance, prepare to have a very deep wallet at a time like this.

Compulsory third party insurance must be taken out for every vehicle on public roads. Without it, the driver cannot even drive the car into the car park outside a shopping centre. If you are stopped by the police and found not to have insurance, you will be fined up to 40,000 CZK. And if you cause an accident without insurance, the Czech Insurance Office will pay it for you, but then claim the full amount from you. And believe me, it can run into millions.

What typical damages are covered by compulsory liability insurance?

Compulsory third party insurance in the Czech Republic protects against the financial consequences of the damage a driver causes to others in an accident. It covers:

• Property damage: If you crash another car, damage a house, a fence or even a street lamp, the insurance company will pay for repairs.
• Injury and Death: It will cover medical costs and compensation if someone is injured or dies in an accident.
• Loss of earnings: If an accident causes someone to lose income (for example, a taxi driver cannot work), the insurance will compensate them for this loss of earnings.
• Legal expenses: It will help pay for the cost of lawyers to deal with the claim.
• Emergency services: If the fire brigade or other emergency services have to attend the scene, the insurance will also pay for these costs.
• Please note: Compulsory third party insurance will not cover damage to your own car – you need breakdown cover for this.

How and where to arrange compulsory liability insurance?

It’s easier than ever to get compulsory insurance. You don’t even have to go to an insurance office in person to get it. You can easily arrange it online and in a few minutes. The fastest option is to arrange it online via the insurance company’s website. Nowadays, there are even various comparison engines to compare quotes so that you can choose the most advantageous one. Some people use their insurance advisor to help them with life insurance or property insurance, for example. An expert can advise you on making a choice to match your exact requirements. And then there’s also the option of going to an insurance company branch if you prefer a face-to-face meeting where they can help you with everything.

When arranging compulsory liability insurance, you will need the vehicle’s technical licence, your personal details (name, registration number, place of residence) and information about who will be the policyholder.

The price of compulsory insurance is then influenced by many factors, whether it is the make and type of car, the engine capacity, the age and residence of the driver or the accident-free history. If someone has been driving for a long time without any accidents, then they will get a discount from the insurance company. On the other hand, young drivers or those who have been in a few accidents will have to pay extra.

What to look out for when taking out compulsory third party insurance?

Many drivers look only at the price and choose the cheapest insurance based on that. But compulsory third party insurance isn’t just about price – it’s also about the limits of cover you have.

If you cause an accident with a lot of damage (for example, crashing a luxury car or causing injuries to multiple people), the basic limit of CZK 35 million may not be enough. That’s why it’s better to choose higher limits – ideally CZK 100 million or more.

What if you don’t have insurance? The penalties are severe

Let’s say you didn’t want to spend money on third-party liability insurance and you thought “it’ll work out”. But you caused an accident and the damage was valued at two million crowns. What now?

If you don’t have insurance, the Czech Insurance Office will claim the full amount from you. And it certainly has neither the patience nor the obligation to wait for you to save this amount. It can seize your account, foreclose on your property, and if you don’t pay, you could end up in insolvency.

In addition, if the police stop you and find that you have not arranged compulsory liability, you could be fined up to 40,000 crowns. In addition, the police may order you to put your vehicle out of service and you may also have to pay a contribution to the Czech Insurance Office’s guarantee fund.

When does the insurance company not pay? The following situations are not covered by compulsory liability insurance

But don’t be misled. Just because you have third-party liability insurance doesn’t mean you can do anything on the road. There are situations where the insurance company will not pay for your claim or will claim it from you.

This can occur if it is proven that you were driving under the influence of alcohol or drugs. Even if you have insurance, you will pay for everything yourself.

Illegal racing or speed testing – have you been playing at being a Formula 1 driver? If you’re convicted, the insurance company won’t pay for the damage.

And then there’s the situation where you deliberately cause damage to your vehicle. Because the insurance company is not a charity, and if you deliberately crash someone’s car, then you will have to pay for the damage yourself.

So what does that mean? Third party car insurance is a legal obligation, but more importantly, it is an important protection. Without it, you risk hefty fines, huge debts and unnecessary hassle. Don’t just choose based on price, but on the cover and services your insurer offers. Whichever option you choose, one thing is for sure – it is better to have insurance and never need it than to not have it and regret it later.

Summary

Compulsory third party insurance is a legal obligation for every car owner and a financial protection against damage you cause to others. It covers the cost of repairing damaged property (cars, buildings, public lighting), treatment and compensation for injured people, loss of earnings for victims, legal costs and emergency services. But it doesn’t pay for damage to your own car – you need breakdown cover for that. If you don’t have compulsory insurance, you could be fined up to CZK 40,000 and have to pay for the damage yourself in the event of an accident, which could run into millions of pounds. Insurance can be arranged easily online, through an adviser or in a branch, and the price depends on the parameters of the vehicle and the driver. It is important to keep an eye not only on the price but also on the limits of cover, as low sums insured may not be enough in the event of a serious accident. The insurance company may not pay if you were driving under the influence of alcohol, involved in illegal racing or caused damage intentionally. Compulsory insurance can save you huge costs and hassle, so it is not worth underestimating.