Car insurance (European Union)

THE PROTECTION PROVIDED BY COMMUNITY LAW
You can insure your car with any insurance company licensed to issue such policies in any Member State of the European Union. This entitlement applies both to compulsory insurance policies in the field of civil liability and to optional insurance policies covering supplementary risks (such as theft, fire, etc.).
If you wish to take out an insurance policy for compulsory civil liability with an insurance company licensed and established in another Member State, the company is entitled to sell you such a policy only if it satisfies the following conditions:
• The insurance supervisory authority of the Member State where the vehicle is registered has been notified by the supervisory authority of the company’s home Member State that the company intends to underwrite motor insurance risks in that Member State;
• it must be a member of the national motor vehicle insurers' bureau and the guarantee fund of the Member State in which your vehicle is registered;
• if it does not have an establishment in the Member State in which your vehicle is registered, the company must have designated a representative authorised to settle claims in that Member State.
You are obliged by law to take out insurance against personal injury and material damage caused by your vehicle. This guarantee covers all the passengers in your vehicle including the members of your family. The green card or the insurance certificate issued by your insurer on conclusion of the contract is taken as proof that you have fulfilled your insurance obligations with regard to civil liability for motor vehicles.
This insurance covers your civil liability throughout the European Union, no matter where the accident happens. Thus under no circumstances may you be required to pay a supplement for this mandatory civil liability insurance when you travel to other countries of the European Union. When you travel to another Member State, presentation of your green card or your insurance certificate is not normally necessary because the licence plates of your car are taken as evidence that you have taken out compulsory civil liability insurance in your Member State.
But if you also want insurance against other hazards, such as fire or theft abroad, the insurance undertaking is entitled to demand a supplement if the cover under the insurance contract is limited to the Member State in which you reside.
In the event of a car accident caused by you, your green card or your insurance certificate constitutes proof that you have compulsory "civil liability" insurance allowing the victims to obtain compensation. All you have to do is to notify the accident to your insurance company.
The injured party will contact his own insurer who will in turn contact the national motor vehicle insurance bureau; this bureau will look after the formalities between the two insurance companies and the injured party. The same system also operates in some other countries which are not members of the European Economic Area (Switzerland, Hungary, etc.).
In the event of a car accident in another Member State for which you are not liable you are entitled to compensation in accordance with the rules in force in that Member State or in your country of residence if the level of compensation is higher in the latter. These rules still differ from one Member State to another but you have minimum coverage of 350 000 Euros for personal injury and 100 000 Euros for material damage. However, the total amount of cover may be limited in some Member States when there are several victims involved in a single claim.
If the accident is caused by an uninsured or unidentifiable car, you are entitled under Community law to compensation from the motor vehicle guarantee fund of the Member State in which the accident occurred, in accordance with the rules in force in that Member State.
The Fourth Motor Directive has introduced new rules to facilitate and speed up the settlement of claims when an accident takes place outside the victim's Member State of residence (visiting victims). The new rules introduced by the Directive also apply to accidents between two EU parties in any of the 40 or so countries covered by the Green Card system.
This Directive provides for an efficient mechanism for settling claims in respect of such accidents. It aims to facilitate and speed up the settling of claims by allowing victims to directly refer to the insurer of the liable party rather than having to refer to the liable party him or herself. Every insurer is required to nominate a claims representative in every EU Member State, so an accident victim will be able to deal with a representative of the liable insurer in his or her own Member State and language. Under the Directive, Member States are also required to:
• impose sanctions to accelerate compensation, where liable insurers take more than three months to make a reasoned reply to a compensation request;
• establish information centres to deal with motor vehicle insurance issues in general, so as to make it easier for accident victims to find out who insures the liable party;
• establish a compensation body to settle claims in cases where there is no claims representative or where the insurer is too slow to settle. This body will then claim the money back from the compensation body of the Member State where the insurer is established.
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REFERENCES
• Council Directive 72/166/EEC of 24 April 1972 on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles and to enforcement of the obligation to insure against such liability (published in the Official Journal, n° L 103 of 2.5.1972, p. 1)
• Council Directive 84/5/EEC of 30 December 1983 on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles (published in the Official Journal, n° L 8 of 11.1.1984, p. 17)
• Council Directive 90/232/EEC of 14 May 1990 on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles (published in the Official Journal, n° L 129 of 19.5.1990, p. 33)
• Council Directive 73/239/EEC of 24 July 1973 on the co-ordination of laws, regulations and administrative provisions relating to the taking-up and pursuit of the business of direct insurance other than life insurance (published in the Official Journal, n° L 228 of 16.8.1973, p. 3)
• Council Directive 88/357/EEC of 22 June 1988 on the co-ordination of laws, regulations and administrative provisions relating to direct insurance other than life insurance and laying down provisions to facilitate the effective exercise of freedom to provide services and amending Council Directive 73/239/EEC (published in the Official Journal, n° L 172 of 4.7.1988, p. 1)
• Council Directive 90/618/EEC of 8 November 1990 amending, particularly as regards motor vehicle liability insurance, Council Directive 73/239/EEC and Council Directive 88/357/EEC which concern the co-ordination of laws, regulations and administrative provisions relating to direct insurance other than life insurance (published in the Official Journal, n° L 330 of 29.11.1990, p.44)
• Council Directive 92/49/EEC of 18 June 1992 on the co-ordination of laws, regulations and administrative provisions relating to direct insurance other than life insurance and amending Council Directive 73/239/EEC and Council Directive 88/357/EEC (third non-life insurance Directive - published in the Official Journal n° L 228 of 11.8.1992, p. 1)
• Directive 2000/26/EC of the European Parliament and of the Council of 16 May 2000 on the approximation of the laws of the Member States relating to insurance against civil liability in respect of the use of motor vehicles and amending Council Directives 73/239/EEC and 88/357/EEC (fourth motor insurance Directive – published in the Official Journal nº L 181, of 20.07.2000, p. 65).