Protection of cargo from loss or damage: can you always rely on CMR insurance? Cargo insurance and CMR insurance. Features and differences18.02.2015 Scary stories of international transportation

Carrier liability insurance is one of the key issues when managing risks in the import procurement process.

The team found that a significant proportion of importers are unaware that almost all cargo transported from Europe is insured under the system CMR-insurance. We tell you the details.

What is CMR insurance?

The relations between participants in the process of transporting international trade goods by road are enshrined in – (from the French “Convention relative au contrat de transport international de marchandises par route”) – the European Convention on the Contract for the International Carriage of Goods by Road (CMR). The Convention states that The cargo carrier is obliged to compensate for any losses that will be associated with the partial or absolute loss of the transported goods that arose through his fault.

To protect the carrier performing international transportation, voluntary civil liability insurance was created, in the professional jargon of carriers - “CMR insurance”. By taking out CMR insurance, in the event of loss or damage to cargo through no fault of its own, the carrier transfers responsibility to the person who is at fault.

And in the event that the damage was caused to the cargo due to the fault of the carrier, the damage is covered by the insurance company (within the limits of the CMR limit). This is similar to the scheme of operation of the Russian OSAGO insurance policy. Accordingly, CMR insurance has a liability limit above which insurance compensation is not paid.

An example of calculating the liability limit of a CMR policy

In CMR, the amount of insurance payment is calculated based on the value of the cargo, but cannot exceed 8.33 SDR units (Special Drawing Rights) per kilogram. Namely – 8.33 SDR/kg or 920 SDR for one missing piece of cargo.

1) Let’s say the weight of your cargo (gross) according to CMR = 800.00 kg;
2) We look at the cost of an SDR unit on the official website of the International Monetary Fund;
3) We take the cost in rubles of one SDR unit on the day of registration of transport documents = 92.584900 R/SDR (for example, the exchange rate was taken as of May 31, 2016);
4) The maximum limit of carrier liability for cargo weighing 800 kg = 800 kg * 8.33 SDR * 92.584900 RUR/SDR = 616,985.77 RUR.

If the value of your cargo exceeds the limit calculated under the CMR policy, we recommend using additional insurance.

Payments under the CMR policy

With CMR insurance, you, as a cargo owner, can receive compensation when the carrier’s fault is proven in the following cases:

in case of damage or complete loss of cargo;
in case of damage caused to the cargo by itself during transportation or by the vehicle on which the cargo is transported;
when delivering cargo to an unauthorized person;
in case of delay in cargo delivery;
with risks associated with customs.

CMR insurance WILL NOT be paid to you if the cargo was damaged due to factors that the carrier could not influence in any way - for example, robbery.

The carriers themselves are skeptical about this type of insurance, since in order to pay compensation, many conditions must be met. Most carriers issue these policies as minimum liability protection.

CMR policies cost the carrier (and therefore the customer) significantly less than full cargo insurance. On average, a typical European carrier spends about 2,000 euros per year on CMR insurance, and this amount is smoothly distributed across placed orders.

Features of CMR insurance

CMR insurance has some important features that are worth paying attention to:

insurance payment occurs only after the carrier’s fault is confirmed (on average this takes about six months);
the CMR policy has a liability limit (see example of calculating the limit above), if exceeded, no compensation is provided;
the value of the goods in the CMR document and the CMR insurance policy must strictly correspond to each other, however, many senders in Europe forget to indicate the value of the cargo in the invoices, so it is worth making sure that the prices match, unless, of course, you have taken out full insurance.

Additional insurance

As you can see, CMR insurance has a number of significant disadvantages, which is why

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Is your shipment a small box that you plan to ship by truck as LTL cargo? What measures need to be taken to ensure that your cargo is protected from damage or theft? Is it enough to make sure that the carrier has a CMR? insurance, and will it cover possible damage, or do you need to think about separate cargo insurance?

First, it is necessary to understand the essence of these types of insurance. CMR insurance covers the carrier's liability to the cargo owner. In other words, this type of insurance protects the interests of the carrier. If during transportation the cargo is damaged or lost, and in connection with this the cargo owner submits a claim to the carrier, then if CMR insurance is available, the damage caused to the cargo owner will be covered by the insurance company. Without CMR insurance, the carrier will have to cover the damage from his own pocket.

Cargo insurance, as the name suggests, covers insurance for a specific cargo. This type of insurance protects the interests of the cargo owner. In addition, this type of insurance provides much broader insurance protection, and avoids undesirable situations in civil liability proceedings between the cargo owner on the one hand, and carriers, forwarders, warehouse workers or, moreover, criminals on the other.

CMR insurance – as an alternative

For those who do not want to have additional hassle, we definitely recommend insuring your cargo. Firstly, you don’t have to waste time finding out the number and contents of the carrier’s or forwarder’s insurance policy. Secondly, you will not have to participate in the unpleasant procedures of proving damage. Insurance broker Vilius Rosinas, specializing in the field of CMR insurance, emphasized that it is not enough to find out just the insurance policy number - it must be checked with the insurance company. Quite often it turns out that the policy owner has not paid insurance premiums or does not comply with other insurance conditions. In such cases, his insurance policy is invalid.

However, if the cargo owner does not wish to additionally insure his cargo, the carrier's civil liability insurance policy may be an alternative solution. As already mentioned, this policy will cover damage to the cargo owner, but only if the cargo is damaged or lost during transportation (i.e. due to the fault of the carrier). Unfortunately, if the carrier’s guilt cannot be proven, the insured event will not be covered by CMR insurance, and compensation for damage will have to be addressed directly to the person who is found guilty of causing the damage. Only a court can determine who is responsible for causing damage.

CMR insurance will also be invalid if it is proven that the damage was caused by intentional actions of the carrier or his gross negligence. These circumstances are additional reasons why the cargo owner should not blindly rely on CMR insurance.

Additional cargo insurance is also convenient in the sense that in the event of damage, the cargo owner directly receives compensation from the insurance company. In turn, the insurance company, by way of recourse, returns the funds paid under the insurance from the direct culprit.

CMR insurance will cover damage caused to the cargo due to a traffic accident, fire, too low or too high temperature, damage from moisture, theft of the vehicle along with the cargo. It is important for carriers to know that CMR insurance also covers damage caused to third parties by the cargo (for example, spilled aggressive chemicals, dropped boxes, etc.)

How is the amount of damage calculated?

If you have CMR insurance, the amount of damage is determined differently. As a rule, damage is calculated based on the value of the cargo at the time it was accepted for transportation. This method does not allow artificially increasing the amount of damage due to customs duties or transportation costs.

The cost of cargo is determined based on stock exchange quotes. If there is no such information, then based on the current market price. If such information is also missing, then it is based on the usual cost of goods of the same type and quality. The cost of cargo can also be determined on the basis of documents issued at the loading site (according to the invoice). This method is used not only in Lithuania, but also in international practice.

In addition, the CMR Convention stipulates that the maximum liability of the carrier cannot exceed 8.33 SDR (Special Drawing Rights, English SDR) for each missing kilogram of gross weight (i.e. with packaging) or 920 SDR for one missing cargo place. The SDR is a conventional monetary unit, the rate of which is “pegged” to four major currencies: the euro, the US dollar, the pound sterling and the yen. Today, 1 SDR is 1.26 euros. This means that the carrier’s liability for 1 kg of damaged or lost cargo cannot exceed 10.50 euros, and for 1 unit of cargo space – 1,159.20 euros.

When determining the amount of damage, one important detail must be taken into account: the carrier is obliged to compensate only for the damage that is proven by the cargo owner, but not the maximum amount. In order to receive compensation based on CMR insurance, damage must be proven. This means that the court must establish not only the content and extent of the damage, but also the culprit who caused it. In other words, the carrier should not assume the blame in advance; this should be determined by the court.

If the damage exceeds the established CMRConvention limit

What to do in cases where the limit for damages established by the CMR Convention is not enough? Let us remind you that the provisions of the CMR Convention apply only when the value of the cargo is not indicated in the CMR invoice. If the consignment note contains a note about “particularly valuable cargo” and the value of the cargo is indicated, the insurance company (provided that the damage to the cargo was caused by the fault of the carrier) is obliged to pay compensation based on the value of the cargo - this is stated in Article 24 of the CMR Convention. And Article 26 states that “the sender may indicate, by writing in the consignment note and subject to the payment of a surcharge to the carriage charge established by mutual agreement, the declared value of the cargo in the event of loss or damage to the cargo, as well as failure to deliver the cargo within the agreed period. In case of declaration of the value of the goods upon delivery, compensation may be demanded, regardless of the compensation provided for in Articles 23, 24 and 25, and within the amount of the declared value of the goods, compensation corresponding to the additional damage that has been proven to have occurred.”

Insurance broker V. Rosinas noted that, for example, German companies require that carriers operating in Germany have special insurance policies in which the liability exceeds 8.33 SDR.

Compensation for damage under CMR insurance

So what to do if your cargo, which you did not additionally insure, arrived at its destination damaged or did not arrive at all?

V. Rosinas says that in such cases, a claim must be sent to the carrier or forwarder (depending on who you ordered the transportation service from). Your “offender” must inform the insurance company about the received claim. Then everything is relatively simple - if the damage falls within the definition of an “insured event”, the insurance company will have to pay you compensation.

How to determine whether it will be enough to rely on the carrier’s CMR insurance, or whether you should insure your cargo additionally? V. Rosinas says that such points as the reliability and many years of experience of the carrier, as well as favorable insurance conditions (the list of risks included in the insurance policy and the amount of insurance amounts) should increase confidence in CMR insurance.

It is worth noting some other nuances - in particular, the issue of damage that was caused to the cargo at the time of loading. In some cases, this damage may not be within the carrier's liability. Purely formally, transportation begins from the moment the cargo is completely loaded into the vehicle, and ends when the cargo is completely separated from the vehicle. Taking these nuances into account, it is necessary to make sure that the terms of CMR insurance also apply to the loading/unloading process.

Most likely, our readers have already realized that against the backdrop of the subtleties relating to CMR insurance, basic cargo insurance looks more attractive. The CargoNews.lt interlocutor noted that usually this type of insurance is inexpensive - from a few tenths of a percent to several percent of the total cost of the cargo. The final cost of this type of insurance depends on the transportation route, the type of cargo, the type of vehicle, the possible number of overloads, the amount of the deductible, the total cost of the cargo and the insurance protection option. For example, one-time insurance for a cargo weighing 50 kg and a total cost of 1000 euros (let’s say these are children’s toys), with the condition that the cargo will travel from Vilnius to Berlin as a groupage cargo, can cost 30 – 70 euros. This is a purely indicative example - the insurance broker emphasized that any insurance is individual in nature, therefore there cannot be one, universal cost for cargo insurance.

One way or another, for those who do not want to waste time and nerves on evidence and not always pleasant communication with carriers and forwarders, we advise you to choose cargo insurance. At least it protects the interests of the cargo owner. True, even in this case it is necessary to carefully read the text written in small letters!

Object of insurance are the property interests of the Insured (the person whose liability is insured) that do not contradict the legislation of the Republic of Belarus, related to:

With his liability for obligations arising in the event of damage to life, health or property of third parties in connection with the use by the Insured (the person whose liability is insured) of vehicles for the transportation of goods carried out in accordance with the provisions of the Convention on the Treaty of International Relations road transport of goods of 1956 with current amendments (hereinafter referred to as the CMR/CMR Convention), Intergovernmental Agreements on International Freight Transport, the legislation of the Republic of Belarus on the carriage of goods by road, as well as the national legislation of the states through whose territory goods are transported;

With the costs of disposal (destruction) of lost (deteriorated) cargo;

Judicial and extrajudicial expenses (expenses for the services of experts, lawyers) arising in connection with the satisfaction of legitimate and defense against unlawful claims.

The insurance contract can be concluded in the following options:

Option 1: declaration of transportation for a certain period. In this case, all transportation carried out during the validity period of the insurance contract are considered insured. The insurance premium is calculated based on the estimated freight for the entire period of validity of the insurance contract.

Option 2: declaration of each cargo shipment. In this case, undeclared cargo transportation (i.e. not declared before it begins) is considered uninsured.

Option 3: combined method. In this case, transportation carried out on the transport of the Insured (the person whose liability is insured) is considered insured without the mandatory declaration of each transportation (registration numbers of vehicles are specified in the insurance contract or in an appendix to the insurance contract). Transportations that are carried out using hired transport not specified in the insurance contract are declared before they are carried out.

Option 4: declaring vehicles with payment of a fixed insurance premium. In this case, all transportation carried out during the validity period of the insurance contract on the vehicles specified in the insurance contract are considered insured without subsequent provision of information about the actual freight for the insurance period.

The insurance contract is concluded based on a written application from the Policyholder.

The insurance contract can be concluded for a period of one cargo transportation or for a period from 1 month to 1 year inclusive.

Insured event It is recognized that the Insured (the person whose liability is insured) caused damage to the life, health and/or property of third parties during the transportation of cargo in accordance with the provisions of the CMR/CMR Convention during the validity of the insurance contract, which entailed:
1. onset of liability of the Policyholder (the person whose liability is insured):

For damage, complete or partial loss of cargo accepted for transportation in accordance with the CMR/CMR Convention, except for the loss of cargo due to its delivery to an unauthorized recipient.

For the loss of cargo accepted for transportation in accordance with the CMR/CMR Convention due to its delivery to an unauthorized recipient;

For financial losses incurred by the Insured's client due to delay in delivery of cargo, payment of freight charges, customs duties and duties associated with the transportation of cargo accepted for transportation in accordance with the CMR (clause 4, clause 5 of Article 23 of the CMR) ;

For causing harm to the life, health, property of third parties during the transportation of cargo, including the environment, carried by the cargo.

Before the customs authorities, due to violation of customs legislation in connection with payments imposed by the relevant authorities on the Insured (the person whose liability is insured). Under this clause, insurance does not cover losses associated with violations falling under the Customs Convention on the International Transport of Goods using a TIR Carnet (1975 TIR Convention) and losses associated with the payment of customs duties and taxes provided for in paragraph 4 of Art. 23 CMR Convention

2. expenses of the Policyholder (the person whose liability is insured) associated with the occurrence of the insured event:

For disposal (destruction) of all and part of the cargo unsuitable for further use due to its destruction;

For judicial and out-of-court expenses (expenses for the services of experts, lawyers) of the Insured (the person whose liability is insured), arising in connection with the satisfaction of legitimate and protection from unlawful claims, to the extent that they were necessary and proportionate to the circumstances of the insured event.

When the case occurs, the consequences of which may lead to liability of the Insurer under the insurance contract, the Policyholder is obliged to:

Immediately, as soon as he becomes aware of the occurrence of the incident, but no later than 3 working days, inform the Insurer about the incident. Notification must be made in writing by submitting an application or sending a facsimile message indicating the circumstances, possible causes and time of the incident;

Immediately report each case of illegal actions of third parties (theft, robbery, etc.), as well as each case of a traffic accident, fire of cargo or vehicle to the relevant authorities of the country where the incident occurred (police, militia, fire service and etc.);

Take all reasonable and available measures under the circumstances to reduce possible losses;

Strictly follow all instructions of the Insurer or its representative (if received);

Immediately inform the Insurer about the stated claims, claims and dispute the claim in the manner prescribed by law, as well as provide the Insurer with the opportunity to participate in the trial;

Do not acknowledge or pay the presented claim without the prior consent of the Insurer;

Assist the Insurer in investigating the causes and circumstances of the insured event and in obtaining the necessary materials;

To pay insurance compensation To the statement of the event, the Policyholder must attach:
1. a set of documents received from claimants to substantiate claims against the Insured, including:

Claim letter;

An original copy of the CMR consignment note with the consignee’s notes about the shortage or damage to the cargo; for consolidated shipment - cargo manifest;

A copy of the TIR Carnet (Carnet-TIR).;

Invoice for cargo (invoice), issued in accordance with the procedure established by law;

Emergency certificate, examination report;

Calculation (costing) of the loss claimed to the Insured;

If the claim is not made by the consignee, but by the insurance organization that insured the cargo, it is necessary to submit a document confirming the transfer of the cargo owner's rights to this insurance organization after payment of insurance compensation for cargo insurance.

2. a set of documents, the receipt and submission of which is mandatory for the Insured (depending on the type of incident), including:

In case of a traffic accident - a certificate and protocol from the traffic police;

In case of theft of cargo or other illegal actions of third parties - a copy of the statement of illegal action, a certificate and a protocol confirming the fact of contacting the relevant authorities and initiating a criminal case on the basis of these incidents;

In case of loss or damage to cargo by fire - a certificate and protocol from the competent authorities confirming the fact of the incident and an expert assessment of the condition of the cargo;

One of the most important risk management mechanisms in business related to international transportation and import purchases is carrier liability insurance or, as carriers themselves sometimes call it, using professional jargon, construction and installation insurance. However, in the generally accepted documentary version, for a policy that protects the rights of the performer during international transportation, they often use not the slang phoneme “insurance for construction and installation work,” but the full name of the policy or an abbreviation derived from the French name of the Convention on the Contract for the International Carriage of Goods by Road (“Convention relative au contrat de transport international de marchandises par route") - CMR.

Basis for CMR insurance

Importers, as a rule, know that almost all cargo imported from Europe is insured under the CMR-insurance risk insurance system, but, nevertheless, not always.

The Convention, which regulates most issues related to international transport, defines the rights and responsibilities of three parties involved in the process: the sender, the recipient and the cargo carrier. With regard to the cargo carrier, the Convention states that he is obliged to compensate for losses associated with the partial or complete loss of the transported cargo, if these losses arose through his fault. To protect the carrier from financial losses and provide risk insurance, civil liability insurance was introduced on a voluntary basis.

A clear division of the area of responsibility between the carrier himself and third parties, through whose fault the cargo could be damaged, introduces a limit of liability for the carrier and reveals not only the attractive aspects of CMR insurance.

The CMR system is a voluntary insurance used in international transport, which may or may not be required. However, even despite the skepticism of a number of carriers towards this category of insurance due to difficulties in obtaining compensation, in practice the carrier’s civil liability is almost always insured.

Firstly, the presence of such insurance serves as an indirect reputational sign for the cargo owner when choosing a transport company.
Secondly, thanks to this policy, in the event of an insured event, the insurance company compensates for the damage to the carrier who insured its professional risks, and the owner of the cargo then recovers the damage from the carrier. (Some insurance formats provide guaranteed compensation for the injured party, that is, the owner of the cargo).

The cost of such damage will include not only the cost of the cargo transferred for transportation, but also the cost of the services of the carrier itself, customs duties, duties and other procedural expenses.

Thus, the greatest risks associated with international transportation are present in the professional activities of the shipper and the cargo carrier, and each of them is insured against possible damage in its own way:

the shipper insures the cargo,
The cargo carrier issues a CMR policy.

Since these are two different policies, CMR insurance does not become a full-fledged alternative to cargo insurance, and therefore the CMR policy is often supplemented with classic cargo insurance.

When issuing a CMR policy, the cargo carrier, in the event of damage to the cargo through no fault of its own, transfers responsibility to the person at fault. If the culprit of the damage was the carrier himself, then the insurance company will cover the damage caused. However, the maximum amount available for coverage by the insurance company is limited by the limit regulated by the Convention. In an amount greater than the amount specified there, insurance compensation will not be paid.

The amount of the insurance payment, according to the provisions of the Convention, is calculated based on the value of the cargo, but it cannot be more than 8.33 SDR units per kilogram or 920 SDR units per missing piece of cargo.

SDR stands for Special Drawing Rights. SDR is translated into Russian as Special Drawing Right. The SDR is a reserve means of payment specified in the Convention as a unit of account. Banknotes corresponding to it were not issued - SDR exists only in non-cash form. The SDR interest rate is revised every week in accordance with the weighted average of interest rates established in the money markets for short-term loans. On the official website of the IMF you can see the current value of SDR, which is necessary to make calculations to determine the maximum limit of liability. The Convention states that the amount must be converted into the national currency of the country whose courts will hear the case.

Taking this into account, the step-by-step calculation of the liability limit is as follows:

If the actual cost of the transported cargo is higher than the resulting amount, and risk reduction is a priority, then it is necessary to use other additional types of insurance.

Payments under a CMR policy: features and capabilities

The carrier's civil liability contract is concluded between the insurance company and the cargo carrier. In countries that have signed the International Convention on the Contract of Carriage by Road, this is how the carrier's liability is insured when fulfilling an order. In most cases, the policy covers liability:

for loss and damage to cargo (damage can be caused both by the car and by the cargo itself),
for violation of delivery deadlines and losses incurred in connection with this by the owner of the cargo,
for incorrect address upon delivery (with reimbursement of expenses for moving the cargo to the correct address),
for the delivery of cargo to an unauthorized person,
for violation of the sender’s instructions and incorrect execution of documentation that occurred through the fault of the cargo carrier,
for damage caused to third parties (property and health),
for failure to comply with customs rules during the import, transit and export of cargo (taking into account possible fines and penalties).

However, insurance is not paid if the cargo is damaged due to uncontrollable factors - for example, during a robbery, fire, road accident, getting wet, overturning a vehicle, or theft. Also, the terms and conditions of a number of insurance companies offering CMR policies indicate that the carrier’s liability is not covered if:

there was negligence in relation to the transported cargo,
packaging rules were violated,
the cargo was sent in an already damaged condition,
during transportation, vehicles with significant technical defects (including refrigerated bodies) or vehicles not specified in the insurance policy were used.

It is also important that the cost of the goods in the CMR invoice and in the CMR policy completely coincide.

Insurance payment occurs after the carrier’s fault is confirmed. Due to technical difficulties (variety of characteristics of the goods being delivered, remoteness of the vehicle, etc.), this is sometimes quite difficult to do and in practice the process takes about six months. To facilitate the procedure for identifying the culprit in the event of an incident, expert organizations are often involved. However, a CMR policy, for which a European carrier spends about 2,000 euros per year, is significantly cheaper than full cargo insurance, which in some cases makes this category of insurance feasible and profitable.

The insurance industry is an essential part of the life of every car owner. But unfortunately, when you find yourself in situations described as insured events, it is not always possible to quickly resolve the problem with insurance payments. We should talk about how insurance payments occur due to an accident in this article.

Insurance compensation is a payment from an insurance company based on an insurance agreement concluded with the user. This payment is made if the policyholder is in an unfavorable traffic situation, which is interpreted by the agreement as an insured event.

You can receive insurance compensation in monetary terms. Moreover, both non-cash and cash payments are allowed. In addition, compensation may be intangible. This is for example if the policyholder, as an insurance benefit, chose to have his vehicle repaired at one of the service stations with which his insurance company has signed an agreement. Naturally, all repair work will be carried out at the expense of insurers.

Important! Insurance compensation under compulsory motor liability insurance is made exclusively to the injured party. The driver who was found to be at fault for an accident on the road may not count on compensation under compulsory motor liability insurance.

Insurance payments after an accident are made by the insurance company after a written request from the policyholder and submission of the relevant documentation. At the same time, conflict situations often arise between the parties to the insurance agreement, since insurers set themselves the goal of paying less, and policyholders - getting more.

As for the amounts of insurance compensation, they fluctuate within such limits.

If the MTPL policy was issued after October 1, 2014, the limit amount of compensation is 400 thousand rubles.
If the MTPL policy was issued before October 1, 2014, then in this case the maximum amounts of payments are:
120 thousand rubles when causing property damage to one victim;
160 thousand rubles for property damage to several victims.

It is worth noting that these limits of insurance compensation apply in those emergency situations in which the registration of an accident occurs with the active participation of the traffic police. If an accident is registered in accordance with the European Protocol, then some compensation limits are established in other amounts.

Separate limits of insurance compensation are established for cases where, as a result of a road collision, the victim is diagnosed with injuries and damage of varying degrees of severity. Currently, compensation limits are set within the following limits.

If the MTPL policy was received within the period starting from April 1, 2015, then in this case the victim can count on compensation of 500 thousand rubles.
If the insurance policy was issued before April 1, 2015, then the maximum rate of insurance compensation is set at 160 thousand rubles.

It is worth noting that limits are set for each specific insured event. The compensation amount is the same for all users. And, therefore, it does not matter which insurance company is better to contact, they all work on the basis of uniform standards.

Until August 2, 2014, a victim of an accident had the right to apply for insurance compensation from any insurer (his own or the person responsible for the accident). Now all insurance claims go exclusively through your own insurance company.

In order to be able to contact your insurers for insurance compensation, several prerequisites must be met:

the damage was diagnosed exclusively in relation to the machine;
at least 2 cars were involved in the accident;
All participants in a road collision at the time of the accident have valid MTPL policies.

Important! If the insurance period for using the car has ended, but the compulsory motor liability insurance is not valid, then the contract will be considered valid.

If there is a case of a non-contact road accident, that is, there is no direct collision of cars, then in this case the problem regarding direct compensation for losses and the simplified procedure for processing road accident documentation cannot be resolved.

There are often situations when victims of an accident are forced to file a complaint with the RSA (Russian Union of Auto Insurers). This often happens for the following reasons:

when the culprit of the road accident fled the scene of the crime and there is no way to establish his identity;
if the culprit of the emergency does not have a compulsory motor liability insurance policy at the time of the collision, or in the case when its validity period has expired;
if the insurance company responsible for the car accident was deprived of its license to provide car insurance services, or it was declared bankrupt.

The commentary of the Supreme Court of the Russian Federation follows on who will be held responsible for making insurance payments in the event that an insurance company is declared bankrupt or its license is revoked.

OSAGO insurance when payment in case of an accident is not due

Compulsory motor vehicle liability insurance pays out in case of an accident if the person is not at fault. If the culprit is not identified, or he fled the scene of the accident, then in such a situation, insurance compensation will need to be claimed through RSA, since your insurers will most likely refuse. If a situation arises in which the insurance company of the person responsible for the incident is liquidated, declared bankrupt, or excluded from the RSA, then the victim has the opportunity to send his application for compensation to another insurance company located:

in the region of the Russian Federation where the accident took place;
at your place of residence.

Insurance payments after an accident will be made within the period established by law. It is worth noting that the insurance contract and legislation provide certain grounds for a road collision to be classified as an insured event. In accordance with these grounds, damages are provided to the injured party.

Thus, we can conclude that the receipt of compensation payments is provided exclusively for the injured party. As for the culprit of the incident, payments under compulsory motor liability insurance will not be made in respect of him.

In some cases, the insurance company may refuse to make payments for an insured event based on the law. In particular, situations where payments will not be made according to the law include:

if the car was driven by a citizen whose name is not indicated in the insurance policy (the exception is situations when insurance is issued for an unlimited number of persons);
if damage to the vehicle and the driver’s health was caused by dangerous cargo that was not insured;
compensation for moral damage, as well as lost profits;
the amount of insurance compensation established above the legal limits for compulsory motor liability insurance;
if the damage was caused by experimental, sports or educational activities;
if the accident occurred during work on the territory of an enterprise or organization.

In addition, if compensation payments are not made at all, then it is also possible to identify cases when insurers pay off the debt on insurance compensation, but at the same time receive the right to demand a refund in accordance with the recourse procedure. This means that the insurance company will make insurance payments after an accident on time, but at the same time has the right to go to court and demand from the client the funds previously paid to him. This is possible in the following situations:

if at the time of the traffic accident it was established that the client was driving in a state of alcohol or drug intoxication;
if the driver of the vehicle intentionally caused harm to the health, life or property of others;
if the driver was driving a car without a license;
if after the collision the client left the scene of the accident, thereby violating the current traffic regulations;
the accident occurred during a period not covered by the insurance contract.

It's no secret that at the moment compulsory motor liability insurance has clearly fixed maximum payment amounts. If it happens that the damage exceeds the established limits, the remaining amount will be recovered directly from the person responsible for the accident. If you want to protect yourself from such a situation, you can insure your car using a DSAGO policy.

The cost of this insurance is about 1 thousand rubles, and the policy applies to all amounts that exceed the MTPL payment limit. As a rule, insurance compensation under DSAGO is provided in the amount of 1 million rubles. This money will cover the difference in payments.

Thus, DSAGO is an excellent addition to the compulsory MTPL insurance policy, and will help you avoid a lot of troubles that can happen to you and your car.

Insurance payment to the culprit of an accident

Speaking about the procedure for paying out insurance for an accident, it is worth noting that everything depends on the specifics of each specific case.

You can receive insurance compensation under compulsory motor liability insurance if you are considered not only as the culprit of the accident, but also as the victim. This situation occurs in cases where several cars are involved in a traffic accident, and at the same time, the violation of the rules was committed not only by you, but also by other participants in the collision. If this happens to you, the insurance company will pay compensation to the second participant in the accident, and in turn, his insurance company will compensate for your damage that was caused by their client.

However, you should be prepared for a situation where the insurance company is not eager to pay you money, and in this case goes to court, where the matter will be resolved. And here everything will depend on several factors. Firstly, it depends on how exactly the judge interprets the law on compulsory motor liability insurance. How strange, but legal conflicts provide the opportunity for completely different interpretations.

Well, secondly, the final outcome of the process will depend on the lawyer you choose. If you try to handle your case on your own without involving a qualified lawyer, then most likely the decision will not be in your favor. If you attract a competent specialist to your side, then there is an opportunity to win the case.

The main problem in such situations is the consideration of several claims by the court. This will contribute to confusion, which not every person is able to sort out. If the claims are combined into one process, the situation will be somewhat simplified.

Another controversial issue will be compensation to the culprit for the amount of money that has already been paid by the insurance company in favor of the victim. There can be a variety of consequences here. It is known that in some cases there is a precedent when the culprit himself compensated for all the damage to the victim, and then contacted his insurance company with a full package of documents for compensation. At the same time, all the necessary documentary package was provided in full compliance with current legislation. And the most interesting thing is that the court satisfied his demands, even though the Law “On Compulsory Motor Liability Insurance” does not provide for such compensation possibilities.

Based on all of the above, we can conclude that the legislation does not provide for the possibility of the person responsible for the accident receiving compensation payments. At the same time, the victim will receive compensation only within the amount provided by law. Of course, in order to protect yourself from such problems, it is easier to additionally take out a CASCO insurance policy. In such a situation, all your expenses will be covered, but on the condition that this traffic accident will be classified as an insured event under CASCO.

Documents for insurance payments in case of an accident

The rules for paying out insurance in case of an accident stipulate that in addition to a written application, the client is also required to attach a number of documents. They, in turn, are divided into basic and additional.
The main documentation that the policyholder will need in any case includes:

an identity document (passport), as well as a copy of it, previously certified by a notary office. If the applicant is a foreign national, a translation of the document certified by the embassy will also be required;
bank account or other details to which the insurance company will be required to make payments;
a copy of the Protocol and the Resolution on an administrative violation, as well as a copy of the Determination on the refusal to initiate proceedings for violation of administrative legislation;
notification of an accident, completed in accordance with legal requirements;
certificate of traffic accident No. 154.

In addition, the insurance company may request the client to provide additional documentation, which is presented in the form of:

rental or leasing agreement (if the car is owned by another person);
data from an independent examination carried out by the client and a receipt for payment for the expert’s services;
documents indicating the driver's expenses when evacuating a damaged car, delivering it to a place of storage or repair, and expenses for storing the damaged car.

In accordance with current legislative requirements, the policyholder undertakes to provide the insurance company with the originals of the above documents, or copies thereof, which have been previously endorsed by a notary.

There are situations when a request for insurance compensation comes not from the owner of the car, but from his official representative. In this case, you must also attach to the application:

notarized power of attorney to conduct affairs of this nature;
consent of the guardianship and trusteeship authorities, if payments are made in favor of the minor.

Important! When submitting documentation to the insurance company, make sure that you will be given a receipt indicating a complete list of documents received from you, indicating the date of receipt, the seal of the organization and the signature of an authorized employee of the insurance company.

If some document is missing, or the insurance company needs additional information about the circumstances of the accident, then the insurance company is obliged to notify the client about this fact:

on the same day when the written application is submitted;
within 3 days from the date of acceptance of the documentation.

It is worth noting that insurers do not have the right to demand those documents from the client that are not provided for by current legislation and the list agreed upon in accordance with the Law “On Compulsory Motor Liability Insurance”.

Insurance payment in case of accident terms

In accordance with the Law “On Compulsory Motor Liability Insurance”, the period for payment of insurance compensation is set within 30 days from the date of acceptance of the documentation for consideration. At the same time, this period of time also includes the period established for conducting an expert assessment (5 days).

If the money is not transferred to the applicant within the established period, then he has the right to obtain payments through the court, while also collecting a penalty from the insurance company for late payments. By the way, the law does not specify how exactly 30 days are counted. Are these working days or calendar days? However, judges and legislation side with the applicant.
If the policyholder claims that the payment was made on time, then it is worth adding several days to the 30 days for the transaction to be completed and the funds to be credited to your bank account.

In accordance with current legislation, each day of delay will cost the insurance company 1/75 of the refinancing rate established at the end of the period allotted for settlement operations.

It is worth paying attention that it can often take a long time to pay out under compulsory motor liability insurance. There are cases when the judicial consideration of a case lasted for several years. This often happens due to the insurance company’s refusal to pay bills and the deliberate assignment of a knowingly lower amount of payments.

It is also worth noting that this business practice is typical for small insurance companies. Major players in the market try to resolve everything extremely honestly and quickly. But even they do not miss the chance to underestimate the amount of compensation, believing that the user will not be interested in the lawsuit.