Compulsory motor insurance after an accident: when the driver may have to pay the difference between the insurance payout and the losses

Having a valid compulsory motor third-party liability insurance policy does not always mean that the insurance company will cover all of the injured party’s costs after a road accident. In certain cases, part of the losses may be recovered directly from the person responsible for the accident.

Under Article 1194 of the Civil Code of Ukraine, if the insurance payment is insufficient to fully compensate for the damage caused, the person who has insured their civil liability is obliged to pay the injured party the difference between the actual amount of the damage and the insurance indemnity.

In practice, this situation may arise when the actual cost of restoring the damaged vehicle turns out to be higher than the amount the insurer is required to cover.

For example, if the actual cost of repairs is UAH 300,000 and the insurance indemnity is UAH 220,000, the question arises as to compensation for the remaining UAH 80,000.

In its case law, the Supreme Court has emphasised that where the injured party has received an insurance indemnity but it is insufficient to cover the damage in full, the obligation of the person who caused the damage may remain in respect of the uncovered difference.

At the same time, this does not mean that any amount the insurance company has not paid to the injured party can automatically be recovered from the driver. It is necessary to establish the actual amount of the damage caused, the grounds for and amount of the insurance payment, and the causal link with the accident, as well as to properly substantiate the costs claimed.

Expert opinions, documents on the cost of restoration repairs, the accident records and the insurance company’s documents may also be of particular importance.

Case law also proceeds from the premise that, within the limits of the insurance cover, it is primarily the insurer that is liable to the injured party. It is wrong to place on the insured person an obligation to compensate for the part of the damage that the insurer must cover under the law and the contract.

Therefore, after an accident, it is important not only to obtain the insurance company’s decision but also to establish whether the payment corresponds to the actual amount of the losses and who is legally obliged to compensate for the uncovered part of the damage.

Every accident has its own circumstances, so before bringing claims against the insurer or the driver, it is advisable to carry out a legal analysis of the documents and identify the proper defendant.

If you still have questions about insurance compensation after a road accident or need legal advice, contact the lawyers of the Strategic Advocacy Bar Association. Our specialists will analyse the circumstances of your case, assess the documents and help determine the optimal strategy for protecting your rights and interests.