Insurance for fines: what it really promises and when it can harm you

What is insurance for fines

Let’s start with the most important thing: insurance for fines is a legally problematic name. It is not an insurance product in the true sense of the word, because licensed insurance companies under the supervision of the Czech National Bank do not offer such a product as a standard. In fact, insuring the consequences of a deliberate violation of the law would violate public order and good morals. In fact, under this label, a service is sold based on a contract for representation or membership of a club or association, where the client pays a lump sum and the provider promises representation in administrative proceedings, or sometimes marketing implies payment of a fine if it fails to ‘eliminate’ the offence.

Typically, the client pays an annual lump sum and a team of “specialists” takes over communication with the administrative authority and uses delaying tactics in order to obtain a statute of limitations or a stay of proceedings, but with no guarantee of the outcome. If this does not work, the client often bears the additional costs of the lengthy proceedings in addition to the fine and the points do not “disappear”.

An available attorney advises: If someone promises to settle or even pay the fines for you, you need to read the terms of the contract really carefully and keep in mind that liability for the offense is basically non-transferable.

It’s not about proving innocence, it’s about procedural tactics

The key difference from the standard defense is the goal. The mainstay of these services is not proving material innocence, but using procedural devices to extinguish liability for an offence by the expiration of the statute of limitations.

First, the client is instructed not to consent on the spot and not to accept a block settlement, thus moving the matter to the administrative procedure; then he grants power of attorney to an agent who takes over the communication; this is followed by delaying procedures such as excuses from the hearing, proposing irrelevant evidence or complicating service (for example, through persons abroad); the aim is to stretch the proceedings beyond the typical one year for common offences so that liability is extinguished.

It is fair to add that such litigation may in some cases reveal genuine procedural errors by the authorities or weaknesses in the evidence. The problem is that it can also be perceived as an “on the edge” strategy and often leads to a prolongation of the proceedings rather than a certain outcome.

If you are an ordinary driver who deals with an offence once every few years, the question is whether this model will add value. If you are a professional driver, it may be tempting at first sight to ‘outsource’ the administration, but this does not reduce the risks and sometimes increases them.

What fines insurance usually “covers” and what it almost never does

Fines insurance providers usually focus on common traffic offences that carry a financial penalty as well as points. Typically these are speeding, parking, entering a no-parking zone or talking on the phone while driving.

At the same time, however, the ‘cover’ does not include criminal offences as these are not dealt with as administrative offences but under the criminal law regime.

Exclusions are very important. Typically, it is stated that the service does not cover accidents involving bodily injury, driving under the influence of alcohol or drugs, offences abroad and driving without a valid licence. These are the situations that have the harshest consequences and where drivers most need qualified legal assistance. In practice, therefore, insurance for fines is often aimed at “everyday” offences, whereas for serious problems you still end up with a lawyer and a standard defence.

Insurance for fines is not a standard insurance product; the service typically covers the cost of legal representation, not the fine itself. If the case is not won, the client pays the fine and legal fees. And even if someone pays the fine “for you,” it still doesn’t address the drivers’ main motivation, which is points.

The points system is simpler but tougher for serious offences

Why is the topic of insurance for fines so alive right now? One reason is the change in the penalty system. From January 2024, the points system has been transformed and simplified to three rates of 2, 4 and 6 points. At the same time, it is set up so that if a driver reaches 12 points they will lose their licence for at least one year. The principles of “twice and enough” for the most serious offences and “three times and enough” for moderate offences are also new.

In other words, for some offences you can get into trouble much quicker than before. This is crucial for professional drivers because their exposure to risk is simply higher: they spend more time on the road, they run more deadlines, they face more measurements and inspections.

However, it is important to keep a cool head: Yes, the penalties are tougher, but you can’t “insure” a fine. But a sensible defence and prevention strategy can be set up.

Why insurance for fines can be an aggravating factor

Ironically, the biggest legal risk of fine insurance is that the very act of arranging such a service can be viewed negatively. In summary, the analysis concludes that the Supreme Administrative Court has held that obstructive procedural tactics cannot be used as an aggravating factor in imposing a penalty. On the contrary, the conclusion of so-called insurance against fines may be assessed negatively in certain circumstances, but only if this fact is duly proven in the proceedings and the administrative authority gives specific reasons for it.

The average driver often takes out insurance against fines for fear of ‘being expensive and losing his papers’. However, the very fact that you are paying for a service aimed at circumventing penalties can look bad on the file. For professional drivers, the impact can be even harsher, as administrations and employers (or fleet managers) take a harder look at repeat offenders, and the loss of credibility can have employment implications.

If you want to minimise the risk of a harsher sanction, it usually makes more sense to opt for a standard legal defence based on evidence and argument rather than ‘stalling for time’.

Liquidated damages: when does it make sense to argue means-tested

Some defenses involve the argument of a so-called liquidated damages penalty, a situation where the penalty would be so harsh that it would be an unconstitutional interference with the offender’s property. Both the Supreme Administrative Court and the Constitutional Court have set the boundaries of when a sanction can reach an unconstitutional level.

At the same time, however, several practical rules apply: the administrative authorities do not always have to examine the financial circumstances, but only when the amount of the fine indicates the possibility of a liquidating character. In the case of lower fines, the administrative authority does not normally examine the financial situation unless the party himself objects and substantiates it. For higher fines (especially those with a potentially significant impact), it makes sense to actively assert and prove the liquidating effect, as it cannot normally be successfully invoked without the participation of the party. Most importantly: the burden of proof is on the party, so if it refuses to cooperate, it cannot subsequently plead the disproportionality of the penalty.

For ordinary drivers, this means that the “it’s too much for me” argument has to be substantiated and often won’t even play a role in lower fines unless you actively open it yourself. For professional and self-employed drivers, on the other hand, it can be an important element of the defence, particularly if the penalty interferes with the ability to run a business. But it’s not an automatic win, and certainly not a service included in the price of insurance for fines that will make it happen without your involvement.

How much does insurance for fines cost

Annual lump sums are typically around CZK 3,000 to 4,000 per person or vehicle, sometimes paid on a case-by-case basis and amounts can reach over CZK 10,000 for more serious offences. Some companies also offer low monthly lump sums, but these can be based on a completely different model and you need to distinguish what you are actually buying.

An annual lump sum of around £3,000 to £5,000 for fine insurance may seem comparable to the cost of a full package of legal insurance, such as compulsory liability and breakdown cover, supplemented by legal protection. It is not often the case that insurance for fines is ‘cheap’. Rather, it is that it is marketed on the fear of points and of stiff fines.

If you are a regular driver, it often makes more economic sense for you to invest in legal protection insurance or to keep a reasonable reserve for a lawyer for truly contentious cases. If you’re a professional driver, a combination of prevention (company training, telematics, internal rules), a good insurance setup, and prompt professional legal assistance when you’re at risk of losing your license is often the most effective.

For ordinary drivers, insurance against fines has the greatest psychological value: the feeling that “I am not alone” and that “someone will sort it out”. At the same time, it can also reduce the administrative burden because the provider takes care of the driving. However, the drawbacks are substantial for the ordinary driver: high costs, given that there may not be many offences, no guarantee of success and the fact that penalties remain with the driver, including points, and the service may encourage a risk-taking attitude.

If you drive a little and the offence was more of an exception, it usually makes the most sense to deal with the specific case in a targeted way. In fact, it often turns out that it is not the insurance on the fine that will make the biggest difference, but a quick orientation on whether the authority has evidence, whether the deadlines were met, whether the deed is correctly described and whether it is worth asking for a lighter penalty. For more minor offences, a good defence can be short, to the point and cheaper than an annual lump sum.

When to contact a lawyer now and not wait to see “if it fizzles out”

If you are facing a driving ban, if you already have a higher number of points, if it is a 6 point offence or if your licence is a condition of your job, it is not worth relying on the case being dragged out. This is because it is for the most serious offences that the system works on the principle of ‘twice and enough’ and the road to 12 points can be short.

In these situations, it is safest to quickly assess the evidence, the authority’s procedural approach and possible defences. This is usually where the decision is made as to whether you have a chance at acquittal, a recharacterization of the offense, or at least a reasonable reduction in the penalty. And the assistance of an attorney is entirely appropriate at this point.

At Accessible Counsel, we build a defense on legally clean arguments and working with the evidence, not on promises without guarantees. We will help you navigate what you are really facing, develop a strategy for the administrative process, and make sure you don’t make a mistake that could lead to a worse outcome. For professional drivers, we can also deal with situations where loss of licence needs to be avoided quickly and where it is appropriate to work with reasonableness arguments, including the topic of liquidated damages where relevant and demonstrable.

Summary

Penalty Charge Insurance has the outward appearance of protecting against fines, points and disqualification from driving, but in reality it is not really insurance but a paid legal service based on representation and procedural steps designed primarily to prolong the administrative process until the offence is eventually time barred; this process may exceptionally expose errors by the authorities, but more often leads to longer and more costly proceedings with no certainty of success, and if unsuccessful the driver pays the fine and other costs and keeps the points. Services usually focus only on common traffic offences such as speeding or parking, while they do not cover alcohol, personal injury accidents or other serious cases where legal help is most needed. Following changes to the points system from 2024, which is simpler but more stringent for serious offences, the risk of losing a licence is increasing, particularly for professional drivers, but it is still the case that you cannot ‘insure’ a fine and a sensible defence and prevention strategy is key. Another fundamental risk is that the mere taking out of insurance for fines may be perceived by the courts as an aggravating factor, which may lead to harsher penalties, and therefore in practice it is often more worthwhile to have a targeted defence, legal expenses insurance or early assistance from a solicitor, especially if driving bans, high points or existential implications are imminent.