Starting January 1, 2025, all issued auto insurance policies will comply with the revised legislation on mandatory vehicle insurance. According to these new regulations, the outdated approach of "insurance for the police" will be gradually phased out, marking a shift towards more reliable protection for drivers.
Previously, settling claims after a traffic accident was often a lengthy and complicated process, as compensation depended on the insurer of the at-fault driver. The new system introduces the principle of direct settlement, simplifying and speeding up the process for policyholders to receive compensation directly from their insurer.
For those with existing OSAGO policies issued before January 2025, there will be no immediate changes; these policies will remain valid under their original terms until they expire.
The revised rules also provide for a significant increase in insurance payouts. Under the current system, compensation is capped at 500,000 hryvnias for bodily injuries and 250,000 hryvnias for property damage. With the new regulations, these amounts are expected to rise and ultimately align with European standards.
One of the most notable updates is the elimination of the depreciation coefficient. Starting in 2025, insurers will be required to restore damaged vehicles to their pre-accident condition without applying depreciation.
For vehicles less than five years old, only brand new, manufacturer-approved parts will be used for repairs. For older vehicles, high-quality non-original spare parts will be permitted.
Car repairs will now be carried out exclusively by certified service stations. If a vehicle owner chooses not to use one of the three service centers proposed by the insurer, they can opt for a cash compensation to cover their own repair expenses.
While these updates aim to enhance insurance services, they also result in an increase in policy costs. Although exact rates vary by company, a significant rise is anticipated.
For instance, a policy for passenger cars with an engine capacity up to 1600 cm³ in Kyiv cost 3200 hryvnias in 2024. It is expected that in 2025, this amount will double to 6400 hryvnias. Similarly, for motorcycles or scooters with an engine capacity up to 300 cm³, the policy cost increased from 1088 hryvnias to 2176 hryvnias. Insurance companies are expected to publish updated rate plans soon.