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Brussels, 10th June 2002

Insurance: Commission proposes to modernise and improve EU rules on motor insurance

The European Commission has presented a proposal for a new Motor Insurance Directive which would modernise and improve existing EU rules in this field. The proposal aims to make it easier for people to find car insurance for a temporary stay in another Member State. It will also make it easier to get short-term insurance covering cars bought outside the owner's Member State of residence. That in turn will help people to buy cars wherever in the EU they can find the best value and help stimulate cross-border competition in the vehicle market. The proposal would update some existing provisions, for example on the minimum amount of cover motorists must have. It would make it easier for customers to change insurance provider. Last but not least, it aims to improve protection for pedestrians and cyclists who are involved in traffic accidents. Without an improved common set of EU rules, motorists will continue to be frustrated by the insurance obstacles which currently exist. This proposal follows extensive work by a Commission expert group drawn from the Member States and takes into account wide-ranging consultation of industry, accident victims' associations and other interested parties. In July 2001, the European Parliament called on the Commission to put forward a proposal to update motor insurance rules. This proposal is part of the Commission's efforts to make EU citizens' rights to live, travel and work in any EU Member State, free of bothersome practical obstacles, a reality.

Internal Market Commissioner Frits Bolkestein said: "The aim of this proposal is to make life easier for motorists travelling within the EU, by addressing a number of problems which they frequently encounter today. European citizens have the right to use, buy and sell their vehicles in other Member States. So we need a system that makes it as easy as possible to get insurance cover, for whatever circumstances may arise. That cover needs to be effective across borders. This proposal is the Commission's response to the questions, comments and complaints we have received from citizens and from members of the European Parliament on the operation of the existing Motor Insurance Directives, at a time when cross-border traffic has grown immensely. "

Simple and safe driving within the EU

The Motor Insurance Directives are a major EU success story and a fundamental factor in making the free movement of motorists and their vehicles in the Union a reality. They have permitted the abolition of border checks on insurance, so that vehicles can be driven as easily between Member States as within one country. They also provide a mechanism to compensate the local victims of accidents caused by vehicles from another Member State. The Directives do this by building upon the private sector network of bureaux and the Green Card System set up by insurers. This system works efficiently to provide compensation for the hundreds of thousands of accidents involving vehicles from more than one Member State. The Motor Insurance Directives need to be kept up to date if these advantages are to be preserved.

With the first three Motor Insurance Directives(1), the EU took fundamental steps towards establishing a single market for motor insurance. Those Directives made it compulsory for all motor vehicles in the EU to be covered by third party insurance, and ensured better protection for accident victims. The Fourth Motor Directive(2) completed the system by establishing an efficient mechanism for quick settlement of claims where accidents take place outside the victims' Member State of residence ("visiting victims").

Remaining obstacles

However, a number of problems still remain. It is not only that some aspects of the Directives adopted in the seventies and eighties need to be updated (in particular, review of the minimum amount of cover). There is also a need to fill gaps and to solve common problems that lead to many complaints from European citizens. This is the case in particular for:

  • the large number of people (e.g. students, workers residing temporarily abroad and individuals with secondary residences) who complain about the difficulties of finding insurance for a temporary stay in another Member State;

  • citizens who wish to purchase a new or second-hand car in another Member State and who encounter difficulties in finding short-term insurance cover before the vehicle is registered in the country of importation;

  • the growing demand by pedestrians and cyclists - the weakest parties in traffic accidents - to be protected by the insurance coverage of the vehicle involved;

  • motorists wishing to obtain from their existing insurer a statement relating to their claims record, so that they can negotiate a contract with another insurance undertaking.

The proposed Fifth Motor Insurance Directive would solve many practical problems of these types and would improve the functioning of the Internal Market in motor insurance.

For the full text of the proposal, see:

For further information, see MEMO/02/133.

(1) Directive 72/166/EEC, OJ L 103, 2.5.1972, p. 1 (First Motor Directive); Directive 84/5/EEC, OJ L 8, 11.1.1984, p. 17 (Second Motor Directive); Directive 90/232/EEC, OJ L 129, 19.5.1990, p. 33 (Third Motor Directive)

(2)Directive 2000/26/EC, OJ L 181, 20.7.2000, p. 65 (Fourth Motor Directive).

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