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Expired vehicle insurance will be replaced with compulsory policies

Traffic.
Traffic. Source: Siim Lõvi /ERR

Vehicle owners who do not renew their mandatory motor insurance will automatically be allocated new contracts at a much higher rate, according to a draft law. The government is also planning to introduce automated insurance checks.

Under the current rules, a vehicle can be without insurance for up to 12 months as long as it is not driven.

Siiri Tõniste, head of the financial services policy department of the Ministry of Finance, said this rule has been in force for many years but hundreds of people break it every year.

"Every year, around 350 such vehicles cause accidents in Estonia," Tõniste said. "But apparently in practice, there are probably even more people who don't get caught or get into accidents."

Damage caused by uninsured vehicles is paid out by the Estonian Insurance Association (Eesti Kindlustusseltside Liit), although vehicle owners are sent the bill – and sometimes they can be very big.

Tõniste said this is one of the reasons why the 12-month exemption will be revoked, but another bigger reason is that Estonia will be forced to do so by a European Union directive. "Which means that all vehicles must be insured," she said.

The new bill will automatically allocate insurance to vehicle owners whose contacts expire. A similar rule already exists but only after the 12-month grace period.

"Automatic traffic insurance is provided by the traffic insurance fund. The person receives an invoice. It is considerably more expensive than normal motor insurance," said Tõniste.

The new contracts will be much more expensive. If the average contract currently costs just over €100 per year, the new automatic agreement will be set at over €700. It will kick in as soon as the old one expires.

Tõniste said people who do not want to insure their vehicle will also be able to opt out.

"It is therefore possible to go to the website of the Department of Transport and do one small thing: Remove your car from the active register. Temporarily remove it from the register," Tõniste explained. "It's free, it's easy, it can also be done physically in the service offices of the Transport Administration."

The official said it is also possible to do this now.

"But we can't allow such a liberal regulation any more if I just don't sign a new contract and sometimes I still go into traffic and hope I don't get caught," Tõniste said.

Heavier vehicles must have insurance

New rules will also be introduced for light traffic vehicles, such as scooters.

Vehicles weighing more than 25 kilos with an engine and a speed of between 14-25 kilometers per hour will be required to have insurance, the new draft says.

An exception will be made for electric wheelchairs, but almost half of the scooters currently sold in stores will need insurance.

However, scooters will not need to be registered.

"There are countries that have registered scooters for a long time, there are those that are planning to do so, and there are those that are not," said Tõniste. "At the moment, Estonia is one of the latter. And this certainly poses challenges for motor insurance."

Car or motorcycle traffic insurance is currently linked to the vehicle's registration number, but insurance companies cannot do this.

The police will also not be able to check whether the vehicle has insurance.

"Here, the driver has to carry the policy in one form or another," said Tõniste, adding that other countries show their policies on stickers, with QR codes, or by phone.

"Of course, it could also be carried as an old-school paper. But it must be possible to prove that it is insured, he said," she said.

Tõniste emphasized that although scooters will not be registered, the policy must be linked to a specific vehicle. 

"Scooters still have a more unique identifier. It is possible to distinguish one scooter from another in their technical data," she explained.

The police will check whether the scooter weighs more than 25 kilograms and whether it is insured, "Initially, I think, by detaining the scooters," Tõniste said.

She said a lot of things will need to be clarified in the future, including the price of scooter insurance.

"However, I dare say that it will be significantly lower compared to cars. Their mass and speeds are different, the nature of the damage is different," said the official.

Automatic insurance checks to be introduced

While monitoring scooters will create extra work for the police, insurance checks on bigger vehicles will be carried out automatically by cameras.

"The law simply provides for this possibility. Whether or not it will be used in practice is a matter for the Police and Border Guard Board to decide," said Tõniste, and emphasized that the law does not impose an obligation on agencies.

The explanatory letter of the draft law states that it is probably not practical to develop automatic traffic monitoring only for checking insurance. At the same time, it is noted that this can contribute to the reduction of the number of uninsured vehicles as a deterrent. 

"Expected increase in fines may be rather small," the explanatory letter adds.

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Editor: Marko Tooming, Helen Wright

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