New motor insurance: what has changed for drivers, advantages and possible disadvantages

Updated rules for compulsory civil liability insurance for owners of land vehicles have come into force in Ukraine. Law No. 3720-IX, which came into force in 2025, significantly modernizes the motor insurance system and brings it closer to European standards. The changes include an increase in insurance amounts, simplification of accident settlement, new guarantees for drivers, and gradual alignment with EU standards.

Below, we break down the main innovations, their impact on car owners, and the overall outlook.

What has changed for drivers

The most notable change is the increase in insurance payments.

The maximum amounts for damage to the life and health of victims are now as follows:

• 500,000 hryvnia per victim;
• 5 million hryvnia per insured event, regardless of the number of victims.

Coverage for property damage has also been significantly increased:

• 250,000 hryvnia for damage to one vehicle;
• 1.25 million hryvnia in the event of a multiple vehicle accident.

This significantly expands compensation opportunities, as in previous years insurance limits often covered only part of the losses and required additional payments from car owners.

A notable improvement has been the direct settlement of traffic accidents. If only the vehicle was damaged in the accident, the victim can apply for payment to their insurer, rather than to the insurer of the person responsible for the accident. This approach simplifies the procedural steps and makes it possible to receive compensation more quickly.

In addition, guaranteed payments to victims in the event of bankruptcy of the insurance company have been introduced. Compensation must be paid within 60 days, which provides an additional level of security for drivers.

Simplification of traffic accident reporting

The use of the “Europrotocol” has been expanded—a procedure that allows you to report a traffic accident without calling the police.

In situations where there are no injuries and the parties agree on what happened, drivers can fill out the appropriate form and submit it to their insurance company. This reduces the burden on the police and helps to resolve minor traffic incidents more quickly.

Gradual approximation to EU standards

The law implements the provisions of Directive 2009/103/EC.

It is envisaged that after the end of martial law and Ukraine’s accession to the EU, insurance limits will be gradually increased to the level applicable in EU countries. This means that the motor insurance system will continue to align with European rules and practices.

Pros and potential cons for car owners

Advantages

• significant increase in insurance payments in the event of a traffic accident;
• simplified and faster settlement procedures;
• more guarantees in the event of insurer bankruptcy;
• reduction of bureaucratic burden through expanded use of the Europrotocol;
• a step towards full integration with the European insurance market.

Possible drawbacks

• possible increase in the cost of insurance policies in the future due to increased coverage limits;
• the need to get used to new procedures, in particular direct settlement.

The updated motor insurance system makes the auto insurance market more transparent, modern, and driver-oriented. Increased insurance payments and the introduction of new protection mechanisms reduce risks for car owners and victims of traffic accidents.

At the same time, the gradual approximation to EU standards means that the cost of policies may increase in the future. However, overall, the reform is a step forward aimed at improving safety and service quality on Ukrainian roads.

Still have questions? Contact our lawyers for clarification.