Motor insurance is the most widespread form of insurance in our country—not only because motor third-party liability insurance is mandatory, but also because voluntary Casco insurance holds a significant market share. The many risks on the road that we witness, or experience firsthand often encourage us to seek insurance protection.

 

Motor third-Party Liability Insurance - MTPL

As the name suggests, this type of insurance falls under "Liability Insurance". The Motor Third Party Liability Insurance (MTPL) is mandatory due to the widespread use of motor vehicles and the high risks they pose, with potential damages large enough to cause severe financial losses for both the victims and the liable parties.

This insurance is standardized, meaning coverage and liability limits remain the same regardless of which company issues the policy. Its primary objective is to ensure equal protection for all innocent victims.

Coverage

The MTPL covers the liability of motor vehicle owners and drivers for bodily injuries, death, or material damages caused to innocent third parties in road accidents.

Although compensation is provided to third parties, the at-fault driver also benefits, as their insurance company assumes the financial responsibility. However, if the driver was driving under the influence of alcohol or drugs, was without a valid driving license or intentionally caused the traffic accident, the law deprives him of this protection and after paying compensation to the injured (damaged) persons, the insurer has the right to claim recourse against the guilty driver for reimbursement.

The protective mechanism of the MTPL also benefits victims of accidents caused by unknown drivers or those without valid insurance, i.e. in situations where there is no insurer to compensate them. In this case, the compensation is covered by the Guarantee Fund. If the at-fault driver is known, the Guarantee Fund subsequently files a lawsuit against him (recourse) for reimbursement of the amount.  

Liability Limits

The coverage limits for property and personal damages are established by the Insurance Code.

Extended Claim Period

In the interest of innocent victims of a traffic accident, a longer period has been established for filing claims under motor third party liability insurance - up to 5 years from the date of the traffic accident.

Territorial Coverage

MTPL insurance is valid across all countries of the so-called Multilateral Agreement on the Green Card System[1], which includes the member states of the European Union and the European Economic Area, as well as third countries that have signed the agreement.

Green Card Certificate

To certify territorial coverage when traveling abroad, a "Green Card" certificate is issued (at no additional fee) along with the MTPL insurance policy.  This is a document that certifies that the holder has a valid MTPL Insurance, taken out in their home country and covering the minimum mandatory limits of liability to third parties required by law in the country visited. The certificate is mandatory for travel to countries outside the European Economic Area.

Penalties for lack of mandatory MTPL Insurance

The availability and validity of a valid MTPL insurance is subject to strict control by the State, represented by the Ministry of Interior. Fines for non-compliance are outlined in the Insurance Code.

 

Casco Insurance

Casco insurance is voluntary and falls under property insurance. The term originates from the Italian word for "helmet," reflecting its protective nature. Unlike the MTPL, the Casco insurance covers damages to the policyholder’s own vehicle resulting from various incidents, such as natural disasters, traffic accidents, theft and robbery, malicious actions by third parties, and damages resulting from maneuvers and parking.

Types of Casco Insurance and Coverage

Before purchasing a Casco insurance, carefully review different offers to determine which best suits your needs. Coverage varies, with common options including:

-          Basic Casco usually includes only protection against natural disasters,

-          Partial "Casco" with individual companies includes various events, but not car theft or robbery,

-          Full "Casco" covers numerous risky events, including car theft and malicious actions of third parties, such as vandalism.

Insurance Sum

Typically, the insured sum is equal to the actual market value of the vehicle at the time of the policy issuance, determined based on the vehicle’s make, model, modifications, year of manufacture, and other characteristics.

Repair options for damages occurred as a result of an insured event under the policy

It is important to check what the insurance contract stipulates for the method of repairing the car in connection with the removal of damage under the policy. There are several options, such as:

-          Official service centres of the car brand – often used for vehicles still under warranty,

-          Insurer-approved repair centre (trusted service centre of the insurer) – partner facilities,

-          Customer-selected service centre with “reimbursement of expenses” option – the compensation is based on real damage assessments and the average prices at which the selected service centre operates.

In all cases, an inspection of the car is performed.

 

Car Assistance Insurance

This is a voluntary insurance that provides roadside assistance for you and your vehicle in the event that it breaks down. It is most commonly offered as an add-on to “Casco” insurance, but it can also be purchased as a standalone policy. Coverage includes transportation of the vehicle if the issue cannot be fixed on-site, on-site repairs, and vehicle towing. There are also additional coverages that policyholders can opt for, including parking for the damaged vehicle, hotel stay for the driver, transporting passengers and luggage from the damaged vehicle, and medical transportation. It is essential to carefully review the conditions of the specific offer. For example, check how many times vehicle transportation is covered within the policy term and what total distance limitations apply to this risk coverage. The car assistance insurance (also known as auto assistance or vehicle assistance) could be offered with coverage only for the territory of Bulgaria, or it can be expanded to include international coverage (“Abroad”).

 

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