Auto liability insurance: what is covered and why it matters

Auto liability insurance (mandatory insurance of civil liability of owners of land vehicles) is a basic type of insurance protection provided by the legislation of Ukraine. Its main purpose is to compensate for damages caused to the life, health, or property of third parties in the event of a traffic accident due to the fault of the insured driver.

Below we will consider what exactly is included in the insurance coverage of auto liability insurance and why it is crucial for drivers and victims in traffic accidents.

Auto liability insurance provides financial coverage in the event of damage to the life or health of third parties during a traffic accident. This compensation includes expenses for emergency and planned medical assistance, payment for medications, rehabilitation measures, as well as compensation in cases of permanent loss of capacity to work or death of the victim. This provision is crucial, as medical treatment costs can be significant, and having insurance protection allows for timely assistance and avoids financial pressure on the perpetrator of the traffic accident.

Auto liability insurance covers damages caused to the property of other road users and third parties. This includes the replacement of damaged vehicles, repair of road infrastructure, and restoration of municipal or private property. The compensation mechanism allows for the quick restoration of the victims' property without the need for the perpetrator to spend personal funds, which is especially important in cases where the damages are substantial.

Within the framework of auto liability insurance, there is a provision for compensation for moral damage caused to victims as a result of a traffic accident. This covers non-material losses related to physical suffering, emotional distress, loss of loved ones, or a decrease in quality of life. Including this element in the insurance coverage provides a more comprehensive approach to addressing the consequences of an accident, taking into account not only material but also psychological and social aspects of the damage.

Auto liability insurance does not provide compensation for damage caused to the perpetrator of the traffic accident, their vehicle, or other property. The purpose of mandatory civil liability insurance is to protect the interests of third parties who have suffered as a result of the traffic accident.

If the perpetrator of the accident wishes to protect their own property and receive compensation in the event of damage or destruction of their vehicle, they need to arrange an additional voluntary insurance policy (for example, comprehensive insurance). This combination of policies allows for financial protection for both parties: auto liability insurance covers the damages to the victims, while comprehensive insurance reimburses the expenses of the vehicle owner. This is especially important in situations where the cost of repairing a vehicle can be significant even after a minor collision.